At our
dealership we find that consumers are not only looking for a car loan.. they
are looking for a second chance. Many consumers are unaware of the positive
impact an installment loan, like a car loan can have on their credit rating.
How Can An Auto Loan Help My Credit?
Monthly Reporting
Lenders, like ours report to credit bureaus. Paying
installment loans on time is one of the best ways to improve your score. Installment loans which are
typically mortgage or auto loans have fixed payments that are commonly reported
to bureaus each month. They are generally for an extended period of time.
Reporting payments each month for an extended period of time can have a
tremendous effect on your score.
Risk Level
Installment loans are very different from credit cards or
“revolving” type debt. They are typically secured by collateral, in this case a
vehicle, and bureaus consider these types of loans less of a risk.
Credit Utilization
They are usually for larger amounts. This will have a positive effect on your "credit utilization", which is an important part of your score. Having a large amount of credit extended to you similar to the amounts extended in an auto loan make lenders and bureaus assume you are worthy of credit.
Credit Types
Credit types make up ten percent of your score. Having
varying types of credit (installment, retail, revolving and open) helps your
score.
Paying installment loans on time and in full can be one of
the best ways to improve your score. We are experts in bad credit car loans and
are ready to help get you back on track. With our online credit applications,
you can get an approval in minutes and be on your way to getting into your new
car.
