Fixing Bad Credit

In case you haven't heard, your credit score is pretty important in your financial life. When it comes to auto loans, it's even more important. Probably the biggest factor in determining your auto loan rates and whether or not you'll even be approved for a loan is your credit score. Typically, people with higher credit scores are able to get approved for loans with better interest rates. At Washington Auto Financing, we have lenders that can work with people who don't have the best credit, but they may not be eligible for their lowest rates. If you're struggling with your credit score, try some of these tips for fixing bad credit:

• The first step to fixing a bad credit score is to request a copy of your credit report from one of the major credit bureaus. It'll contain a detailed look at your credit history and descriptions of any debt you've accumulated. You'll want to make sure there aren't any errors on your report, as since they can cause your score to suffer. If you do find any errors or debts that you know nothing about, contact the credit bureau immediately.
• One of the most important factors in calculating your credit score is your debt to available credit ratio. Lenders don't want to see that you've maxed out several cards, as it could be the sign of an irresponsible borrower. Do your best to pay any large debts down and you could see an increase in your credit score.
• Do you struggle paying your monthly bills on time? Making late payments is one of the most notorious credit score killers. Even just a few late payments every year can have a negative effect on your score. Try signing up for an automatic payment plan with your bank if you're forgetful about making payments.
• Did you know that every time you apply for a new line of credit, your score takes a small hit? It's true and the more often you apply for credit, the more your score will be negatively affected. Lenders see multiple credit inquires as a desperation act for someone that can't control their spending, so only apply for what you really need.
• There's always a lot of information spread around about improving credit, but not all of it is correct. One of the major myths out there is that closing an old credit card will help your score. Not only will it not help your score, it could even hurt it. Your credit history is a factor in your credit score, and closing accounts will only serve to shorten your history, so keep those old cards open.
• If you're still having trouble fixing your credit score, consider signing up for a debt consolidation or credit repair service. Although these services often charge a fee, they could help turn your score around and help you attain the auto loan you're interested in.