A car is more than a convenience; for most Americans, it’s a true necessity. Without a car, most people can’t get to their jobs, take their children to the doctor, or even go grocery shopping. However, buying a reliable car can be a challenge, especially for consumers with poor credit. The following are some tips from Consumer Portfolio Services, a finance company that specializes in indirect automobile financing.
Correct Mistakes On Credit Report
When customers try to get a loan with poor credit, they may not be able to get favorable terms. To avoid paying the highest possible interest rate, it can sometimes be helpful to try repairing bad credit. Sometimes, when consumers check their credit report, they discover mistakes that they can correct by providing proper documentation. Consumers most often dispute false reports of late or missed payments.
Request Higher Credit Card Limits
Another factor that affects a consumer’s credit score is the percentage of available credit he or she is using. For example, if a consumer has a credit card with a $5,000 limit and owes $3,000 on that card, he or she is using more than 50% of available credit. By increasing the limit to $10,000, the percentage of credit used will go down to less than 30%. In general, credit card companies will extend more credit to customers who have a solid payment history.
Apply For A New Credit Card
Another way to gain additional credit is to apply for a new credit card, ideally one that comes without an annual fee. However, it’s important to remember that a new credit card should not be considered a new source of cash. Its only purpose is to raise the owner’s credit score by increasing the total amount of available credit.
Share Someone Else’s Good Credit
If a person with good credit allows a friend or family member to share a credit card as an authorized user, the authorized user can benefit from the card owner’s good credit history as well as the additional credit itself. However if the credit card owner misses a payment, the other user’s credit score will also take a hit.
Even with a low credit score, consumers can often get an auto loan. According to the experts at Consumer Portfolio Services, it’s important to shop around and compare interest rates.