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Flamborough Car Loan Myths Busted

Flamborough Car Loan Myths Busted

It’s about time we busted some more car loan myths. We enjoy these kinds of blog posts because they pack a lot into a relatively small space. Common myths and misconceptions we hear all the time around car loans and auto finance. This time, it’s down to our Flamborough car loan team to highlight a few common finance myths we hear all too often. We hope they help!


Closing lines of credit improves your credit score


Not necessarily true. A line of credit is an account. A credit card for example is a line of credit. Closing unused credit cards is a useful exercise to keep life simple and can help prevent accidental overspending.


However, it doesn’t necessarily help your credit score. It could in fact, ding the score as it reduces your credit mix and increases your credit utilization.


Close old accounts by all means but don’t do it because you think it will improve your score.


Keeping to minimum payments improves your credit score


Not true. Sure, having those monthly payments on your credit history looks good but that’s the only benefit.


You’ll pay more in interest, which isn’t good. The balance will contribute to your credit utilization, which isn’t so good and it could appear that you’re having trouble paying off debts because you’re only paying the minimum.


We always recommend paying credit card balances in full each month to minimize interest charges and to keep life simple.


High credit scores guarantee Flamborough car loan acceptance


Not true. There is no such thing as a guaranteed car loan whatever advertising tells you.


While a good credit score dramatically increases your chances of getting that car loan, there is no such thing as a guarantee. Every lender has different criteria and a credit score has no bearing on affordability or other lending criteria.


It’s always good to have a high credit score but nothing is guaranteed when it comes to finance.


You’re stuck with a mistake on your credit report


Not true. You spot an error on your credit report, you ask the organization who made the error to correct it and they said no. That’s not the end of it.


You can contact Equifax dispute resolution and TransUnion dispute resolution and ask them to correct your report. You’ll need to provide evidence to back up your claim but the bureaus will check and make the correction if they think you’re right.


You only have one credit score so you had better look after it


Yes and no. You actually have two scores, so the first part is not true. The second, that you need to look after it is true.


You have two scores in Canada, one from Equifax and one from TransUnion. Both bureaus use different methods to calculate your score. Not all organizations will report to both bureaus, so one may have more information on you than the other, which results in two different scores.


As long as both scores are roughly the same, there’s no need to worry. If there is a dramatic difference between the two, that requires a closer look.


We will use all our skill and experience to deliver the lowest possible Flamborough auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.


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Categories: Auto Loan

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