If you’re struggling with credit right now, you may be wondering if it’s even worth trying to repair it. Credit plays an important role in your life, so it is worth it in most cases. Here are five main reasons why it's in your best interest to try and repair your credit.
5 Reasons to Repair Your Credit
Whether you need to build your credit, repair your credit, or maintain your credit, having good credit can make your life easier. There are many reasons to repair your credit score, but there are five big ones:
Save money on interest charges – You can qualify for lower interest rates with a better credit score. A lower interest rate can help you save money in interest charges on anything you finance. If you don’t watch your credit closely or take steps to improve it, you could find yourself paying more for the rest of your life.- Get lower insurance premiums – In most cases, your credit determines any and all insurance premiums, such as auto and home insurance. The better your credit score, the less you may have to pay.
- Get higher credit limits – If you’re consistent with paying your credit card bills on time, creditors can increase your credit limits. This can lower your credit utilization ratio, which can lead to a better credit score. If you don’t pay your bills on time, your credit card limits aren’t going to increase.
- Buy a house – Many lenders aren’t comfortable approving a mortgage for someone with bad credit. If you want to be able to finance big-ticket items like a house, you're going to want to repair your credit.
- Get a car loan – Just like a home, buying a vehicle with bad credit isn’t typically easy. Traditional lenders place a heavy emphasis on your credit score, making them less likely to approve you if you have poor credit.
Where to Buy a Car with Bad Credit
When you have bad credit, your buying options are generally limited. You may not be able to get pre-approved or even buy through a traditional car dealership, so where do you go? You can get a vehicle through a subprime lender, or a buy here pay here (BHPH) dealer.
Subprime lenders work with special finance dealerships. These lenders offer auto financing to credit-challenged consumers. They do check credit scores, but they also look at factors such as income, employment, residence, and down payment to help determine approval. You can help repair your credit score with a subprime car loan as long as you make each payment on time.
Another option is a BHPH dealer. These types of dealerships don't use outside lenders, instead financing the vehicles on their lot in-house. Because they are the lenders, they don't typically check your credit. As long as you have the income to qualify, it doesn’t matter where your credit score stands. Although it’s easier to get approved for an auto loan with a BHPH dealership, you need to check to see if they report loans or timely payments to the credit bureaus. Some may not do this, which means you can't improve your credit score.
Get Connected to a Dealership Today
If you’re considering taking out a car loan to help repair your credit, but don’t know where to look for the right dealer, we want to help.
Auto Credit Express has been helping consumers find financing for over 20 years by connecting them to dealerships. Our partner dealers work with lenders that know how to handle bad credit and no credit. Getting started is simple – just fill out our auto loan request form, and we’ll get right to work matching you with a local dealership!
