880 Walkers Line, Burlington, ON, L7N 2G2, Canada

Why you should work to improve your credit score

Why you should work to improve your credit score

 

When you’re applying for any kind of loan in Hamilton - whether it’s a mortgage, credit card, or car loan – your credit score comes into play.  Having an idea of what it is before you apply for any of these credit facilities is beneficial because if your score is low or you have no credit history, you’ll have difficulty getting approved.

You find your credit score (you can get it for free from a number of websites) and it turns out to be less than stellar.  A score of below 660 is considered “subprime” and means lenders will be less willing to approve your applications.  If you can’t get approved for a loan at the bank, how can you improve your score?

If this is your situation, a subprime car loan can help.  Institutions that specialize in these types of loans help a lot of people get into vehicles when other lenders may turn them down.  Normally a lender uses a borrower’s credit score to determine how likely they are to repay the loan.  Subprime lenders can use other factors to determine your eligibility such as proof of income, employment history, and length of time at current residence.  When you prove that you have steady employment and pay rent every month on time, it shows you’re a reliable borrower.

The caveat of getting a car loan from a subprime lender is that you’ll be subject to higher interest rates than a traditional institution would offer.  Lenders need to do this to protect their investment in you.  As a subprime borrower, you’re riskier to take on than someone with a high credit score.

Every time you make your car payment on time you improve your credit score.  You’re showing the credit bureau that you are responsible and that’s a good thing!  You’ll be rewarded in the long run with more opportunities to borrow with lower interest rates.

When you need a car in Hamilton but don’t have the best credit, come see us at Car Nation Canada Direct.  Our finance team will help you find a vehicle you can afford and you’ll love to drive.  You can even apply for financing online and get pre-approved before you start shopping.

Categories: Credit Score