Are you the victim of a low credit score and are getting denied for credit from various sources? Many people face this problem every day. The impact of a low credit score has consequences any time you need to borrow money, and sometimes, even when you are trying to find a better job.
A credit score can be improved with time and practice. But how can you improve your credit score more quickly so you can get on with your life? Can you do this with a car loan and auto insurance? The answer is YES.
A Low Credit Score Interferes With Buying a New Car
Many people do not generally save for years to buy a new car. Instead, they accumulate enough cash for at least a down payment. Beyond that, the future car owner must apply for a car loan. If the loan is approved, life is easy. The new owner brings the car, home, and begins paying the loan monthly. That is a normal scenario for a person who has a sound credit score and never faced any hurdle to get the car financed.
The story is different, though, with a low credit score. Having a car financed is not so easy. Usually, credit history is the problem which causes a lower score and is the reason why your loan application was rejected. If you have been rejected from any request for credit or a loan (even a car loan) your credit score goes down even more.
What’s the solution then? How can I improve my credit score fast?
How to Get a Car Loan with a Low Credit Score and Raise Your Credit Score at the Same Time
The solution lies in approaching a car finance company that lends out at a higher rate of interest through a no credit check scheme. A lender will approve a loan to a person after examining supporting documents and income proof but does not go through the credit history checking process. This saves time in processing the loan request and also makes the impossible turn possible for the person who has a low credit score.
You can then smartly use this high rate of interest loan to repair your damaged credit history and credit score.
Here is how you do that–pay the monthly loan back on time every single month. You cannot miss payments, and cannot delay payments either.
By paying the loan each month for a few months, your credit score will automatically improve, and your credit history will reflect the timely payments. Whenever you pay back the entire loan amount, your credit score will improve.
Costly Insurance Can Also Be Utilized To Repair a Low Credit Score
Buying insurance also can be costly with a bad credit score. Creditworthiness is important and is something that all insurance agents look for in new clients. Find plans that allow you to make a down payment and/or be able to make smaller monthly payments. Again, you must pay this every month on time without fail in order to improve your credit score.
On the off chance that you are thinking about any kind of insurance, ensure you comprehend the terms of the arrangement being advertised. Here are four fundamental sorts of insurance than could help improve your credit:
- Life Insurance
- Disability Insurance, or otherwise called mishap and medical coverage
- Unintentional Unemployment Insurance, otherwise known as Automatic Loss of Salary Insurance
- Property Insurance (house, auto, boat, etc.)
If you are a credit risk, you might indeed be denied insurance. If this is the case, you may be able to find an alternative source of insurance that will be at a much higher rate of interest applicable on the monthly payment.
A bad credit score can be rectified and raised with time, and the positive movements in the account of the person will get reflected on the credit history too. All you have to do is follow the right strategy, and pay every debt that you freshly acquire on time.
Silvia Watson is a freelance content writer. She writes informative articles on technology, health, fashion, education, career, travel, etc. You may find her work HERE.
*** Photo courtesy of www.gotcredit.com