Why buy a used car? The answer is simple; money.
Quality pre owned vehicles are an excellent way to save money on vehicle-related expenses. For instance, you may driving a “gas guzzler” or an older vehicle that is less fuel efficient than the modern vehicles available today. However, purchasing a brand new vehicle may be out of your price range. While used car values can vary based on year, make, and model, purchasing a used car is often far less expensive than purchasing a new one.
Cash may be king, however, having a poor credit score can dethrone you by costing you an arm and a leg in high interest rates.
While shopping for new and used cars can be a fun and exciting experience, having poor credit can make the process frustrating. A low credit score can make it difficult to get used car financing, as lenders view you as a greater risk. Based on your repayment history, lenders use this information to determine credit worthiness.
Lenders often offset this risk by charging higher interest rates, however, this can make repayment difficult. By improving your credit, you can ensure you’ll receive affordable used car financing at a rate that works within your budget. Here’s how.
Pay your bills on time
This may seem self explanatory, however, paying your bills prior to or on their due date can help to dramatically improve your credit score. This includes utilities and additional expenses such as cable and internet. If you are having trouble affording your monthly payments, it’s important to contact your creditors immediately in order to discuss repayment options. This allows you to maintain your credit worthiness while paying your debts.
Get a secured credit card
This is perhaps one of the fastest ways to improve your credit. Secured credit cards work in the same way that standard credit cards do except in regards to their limit. A secured credit card’s limit is based on the amount of cash you provide as a deposit. Typically, banks and creditors require a minimum of $500. After a year of making payments on time, it’s not uncommon for banks and creditors to increase the limit and convert the secured card to a standard credit card.
Get a cosigner
A credit worth cosigner is an excellent way to secure affordable used car financing. Keep in mind however, that cosigners are equally responsible for payment of the car loan. If you don’t pay, they are required to do so by law. Therefore, it’s wise to only ask someone who is close to you, such as a family member or spouse to be a cosigner. More like this article.
