Are you facing hardship in getting a fair loan to purchase a car? Is it because of poor credit scores that you are not able to get suitable rates? If you have decided to buy a car with financing, you must walk towards credit improvement.

This is the best way to make sure about getting better rates. Thus, you do not have to shell out a lot of money to grab the most attractive car loan offer. Because of this reason, improving credit scores is necessary.

You cannot expect to get a loan without interest rates, which are responsible for increasing or decreasing the cost of car purchases. To keep it under control, you must work towards enhancing your credit scores. To be able to fetch suitable rates with loans meant for purchasing a new or used car, the specifications for average credit scores are:

  • 714 for a new car
  • 655 for a used car

Based on credit scores, the interest rates obtainable with a car loan are:

Used car loan rateCredit scoresNew car loan rate
3.4%781 to 8502.6%
5.12%661 to 7803.59%
9.47%601 to 6606.39%
15.72%501 to 60010.65%
18.98%300 to 50013.53%

You can pretty much see why improving credit scores is significant. Now, find out how you can go about the process. Detailed steps are going to be discussed in this blog. Stay here.

Prepare for car purchase by boosting your credit scores

This strategy is applicable if you are ready to wait for some time. Otherwise, you might have to accept higher rates, which means a heavier burden of debt. Thus, it would be better to compensate for the required credit scores through credit improvement.

It is worth it to wait for some time. Get car finance for bad credit in Ireland at favourable rates by doing the needful to upgrade credit scores. Although direct lenders are willing to offer practical rates, that might not fit your budget.

·       Check for any dispute in your credit reports

At times, the simplest of things, like incorrect information in the credit report, leads to poor scores. Thus, the foremost thing you must review about your scores should be this. The impact of it on the rates you might have to accept is enormous.

There is no need for you to pay money to collect a copy of the credit report. The free copy is readily available and should be enough to point out the existence of errors (if any). Once any dispute has been spotted, you must take prompt action.

Report the dispute at the earliest so that your credit scores improve. You can do this in the form of mail, phone or through any online mode. Get in touch with the credit bureaus, who will contact them further regarding the source of the dispute.

·       Complete the payments on time

You must be aware of one of the common reasons behind bad credit. This is nothing but late or missed payments. Thus, to see your credit scores improve, you must get payment of pending bills on track.

Put in effort to save as much money as possible from your budget. This can put you in a frugal living space, which might not be very easy. However, you can try getting bad credit loans on guaranteed approval.

These loans incur lower rates and can be effective in meeting pending cash issues. Make sure that you do not take out external funds time and again. Not to forget that these are further debts that you must clear off gradually.

This is where loan repayment becomes inevitable. Your go-to option to consider is preserving your money. This way, you do not have to depend on loans, as personal savings will be there for you.

·       Trim down the credit card balances

A very important factor, i.e. your responsible financial behaviour, is critical in getting credit scores back on track. When it comes to reviewing your credit utilisation, your credit card should grab your attention.

The credit utilisation ratio should be below 30%. A credit card might make the most significant contribution to maximising this ratio. How to keep it down? It is through mindful handling of your existing debts.

Try to depend on this card as little as possible. Unless it is a super emergency, reaching to it should not be in your consideration. Remember one thing: it cannot be done in a day or two.

You need to be patient and serious about your financial responsibilities. With improvement in credit scores, you become eligible for affordable rates and terms.

·       Prevent yourself from applying for a new loan

Some loan options need you to go through a hard enquiry on your credit profile. As a result, your credit scores degrade as these searches surface on your credit history. Thus, if you are already having a tough time managing credit scores, stop applying for random loan offers.

On the other hand, if you are applying with a direct lender, there is no need to face any hard search. In the case of bad credit, you just have to go through a soft search. It would be relevant for validating your affordability.

Thus, another suitable way to avoid harming your credit scores further is by approaching direct lenders. There will be no problem if you fetch loan offers from multiple lenders. Your credit history will remain unscratched.

·       Avoid changing the job or address

Proving financial stability is a great way to obtain favourable rates. If you keep changing your job frequently, it will leave a bad impression on you. The lender will consider your financial condition unstable.

This is because you do not work with a single employer for a long time. Your financial requirements increase as you do not keep expenses under your control. Likewise, when you change the address without notifying, your credit scores suffer.

The bottom line

When you are gearing up for the purchase of a car, accumulate enough money for a down payment. It will put you in advantageous conditions. Besides, when you have a deposit, your chances of getting approval increase.

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