ChooseMyCar
Credit scores, and credit checks, are two key processes that a panel of lenders go through during their decisions about approving, or turning down, an application for vehicle finance. This indicates to a team of experts whether or not you’re a person who has the right kind of financial circumstances for this finance process. In most cases, people with poor credit histories, and bad credit scores, don’t necessarily struggle to get finance, it’s just the vehicle finance application process involves a few more expensive stipulations – such as high deposits and high-interest rates. These can make the monthly payments more expensive when compared to someone who has a good credit report. However, it’s important to note that bad credit car finance is a perfectly viable option, and many people do get accepted for vehicle finance even with a bad credit history.
Here, we’re going to be discussing how to stop your credit score from becoming poor if you feel that it is sliding. We’ll outline a few things you can do to arrest that poor credit rating, and over time, improve it so that you can enjoy cheaper monthly repayments, greater individual circumstances, and the ability to apply for finance more easily, and with greater confidence. While bad credit ratings are less than ideal there are ways to manage them, and people with them shouldn’t let them affect their personal circumstances – it is a problem that can be solved and we would urge a calm, measured approach.
4 Ways To Stop Your Credit Score From Getting Worse
So, if you know that you have been rejected for applications because of a poor score and want the chance to stop it from becoming worse, here are a few things you can do.
Pay off outstanding debt
Debt is a big risk to lenders as it shows them that you may have issues with potential repayments because you’re trying to pay off other plans. Paying off current debt before applying allows you to go into your new application with a clean slate, knowing that any future monthly repayments aren’t going to be hampered by another credit agreement. This will be felt too by the panel of lenders who make the all-important lending decisions.
Go through your credit file and check for errors
While rare, there are instances of errors appearing on people’s credit files. Be sure to check through and, if you find something that looks wrong, you have a right to dispute them under the Fair Credit Reporting Act. For this complaint, make sure you make it in writing, via a formal letter.
Budget
No matter how bad your credit file is, budgeting is one of the best things you can do to help stop it from getting worse. It’s not a short-term fix, but it’s certainly part of the rebuilding job. Knowledge is power, and by knowing what your regular monthly payments are, and calculating your total income, you’ll be able to understand the kind of money you’d be able to outlay when you start the car finance process.
Make current and future payments on time
The easiest and most obvious way to prove to a team of lenders that your credit score is good is by paying for things – be it a phone bill or mortgage payment. It showcases that you’re someone who is a responsible borrower, in the rhythm of paying off debts and loans quickly and has the appropriate income level to take on new finance packages.
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