It takes years to build a good reputation
and only a few mistakes can cause a disaster. The same ideology applies to your
credit score. A few serious mistakes such as missing a payment or two on your
loan could take years to repair the damage. But, a bad credit score is not the
end of your world. A handful of misconceptions and myths revolve around a bad
credit score. And, they discourage people from taking action to improve their
credit score. With the help of pre-approved auto loans, you can break those
myths.
Forget
the Bad Credit Myths; Focus on the Facts
1)
Myth: Taking an auto loan will worsen my already weak credit score
Fact: Applying for an auto loan with a history of damaged credit will
increase your debt-to-income ratio. However, it is not an indicator that
obtaining an auto loan will worsen your situation. In fact, with the help of a
pre-approved auto loan, your credit score can increase over a period of time.
Timely monthly payments are the key to not only stabilizing but also improving
your credit score.
A bad credit score may bring the
possibility of high interest rates. However, a pre-approved auto loan contains
the advantage of pre-negotiating the interest rate that eliminates any last
minute surprises and helps you to efficiently plan your future expenses.
Therefore, a pre-approved auto loan will help you to increase your credit
score.
2)
Myth: A poor credit score means no lender will work with me
Fact: In the case of bad credit history, bank financing is dicey. On the
other hand, there are numerous online lenders that specialize in bad credit
auto financing. Despite you having a bad credit score, these lenders wish to
increase their business and will grant you an auto loan.
Credit scores vary from one individual to
another. So, a lender may even willingly give you a pre-approved auto loan if
your score is higher than the other applicants. As many applicants have zero
credit score, you stand a greater chance at obtaining a pre-approved auto loan.
3)
Myth: The first auto loan deal is the best deal
Fact: Many people fall prey to the thought that bad credit means no
bargain. A damaged credit history compels people to take the first deal that
the lender offers them. However, comparison shopping is the best method to get
the lowest price.
You must study the current market before
making a decision. Always have two or three competing offers to help you
leverage the best deal. A pre-approved auto loan will help you in negotiating
effectively as you will have a realistic price in mind. Moreover, researching
the interest rates and the price of the car you wish to buy will assist you in
getting the most out of your pre-approved auto loan.
Many myths exist when it
comes to bad credit. The fear of a weakened credit score, inability to search
for a lender and dismissing comparison shopping are a few myths that need
reevaluation. When it comes to buying a car with bad credit, do not discard the
option of pre-approved auto loans. Remember to understand your situation
thoroughly and work with lenders who do not shy away from helping people with
damaged credit.
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