How to Raise Your Credit Score While Car Shopping

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Even with poor credit.

By

Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - April 20, 2020

While you’re still car shopping and deciding which vehicle is best for you, there are things you can do to raise your credit score. Doing this increases your chances of getting approved for an auto loan, and can help get you qualified for the best interest rate possible for you.

Your Credit Score Matters

Although choosing the perfect vehicle at the best price point may take up a lot of time during the car shopping process, you should also be thinking about raising your credit score in the meantime.

Your credit score is a large part of your car buying power. If you’re planning on financing your next vehicle, it's likely to be used to help determine how much you can finance, if you’re eligible for special deals, and the interest rate you qualify for.

You should know what your lender is looking at so you can be an informed borrower, and know where to start improving your credit score.

Start With Your Credit Reports

Having accurate credit reports is vital to your credit score’s health, since your credit score is calculated using the information listed on your reports.

Have you reviewed your credit reports lately? If you haven’t, you can request a copy for free, once every 12 months, from each of the major credit reporting bureaus: TransUnion, Experian, and Equifax. They’re all likely to have different information, so take the time to compare them.

Once you have your reports, examine them closely for any errors or discrepancies. A negative error could be passively lowering your credit score, but you won’t know if your credit reports are accurate unless you investigate.

Raise Your Score With Credit Repair

If you do find an error – such as a past-due active account that you’ve already paid – you can report it to the credit reporting bureau by filing a dispute.

The bureau has 30 days to act on the dispute, but for an error to be removed and help your credit, you must prove that it's wrong. Using our example, if you’ve already paid the account that’s harming your score, send a copy of the receipt reflecting that the balance is paid to the bureau so they can remove the error. Any documents you have that can help your case should be included in the dispute.

One little error may not seem like much, but bad marks such as missed or late payments can remain on your reports for up to seven years. And since payment history is the largest factor in determining your score, making sure everything is up to date is crucial.

If you find multiple errors that you have trouble correcting, there are credit repair companies that can help dispute them for you. They typically charge a monthly fee, but if you’re buried under multiple errors and don’t know where to start, it could be a great way to improve your score before your next car loan.

Other Quick Credit Score Tips

There are a few other ways to improve your credit score while you’re still shopping for a car:

  • Keep up on payments – Payment history is the largest factor in determining your credit score. Make sure you stay on top of all your accounts.
  • Mix up your credit – Credit mix is another factor in your credit score, and it considers the different types of credit you’re using. If you only have installment loans on your credit reports, consider applying for a credit card. Credit cards are revolving credit, and mixing up how you borrow money can help raise your score.
  • Amounts owed – This also affects your credit score, and it's typically recommended that you keep credit card balances below 30% of their credit limits. If you have high balances on your credit cards, lenders may be hesitant to approve you for an auto loan.
  • Quick boost – Our partner is featuring a free, quick boost to your credit score just for signing up for their services. This service reports your timely payment activity on utility bills, such as cable or phone, to a credit bureau, which can give your credit score a boost.

Overall, make sure you continue to make timely payments on your bills and other debts, reduce amounts owed, and review your credit reports. Your credit score is essentially a grade of how well you handle repaying money, so the best way to improve your credit score is to repay the money you’ve borrowed!

Shopping for a Dealership

Car shopping should include improving your credit score to help increase your chances of getting financed. However, if your credit score isn’t the best, it can be hard to raise it quickly – especially if you need a vehicle now. Thankfully, there are dealers that work with subprime lenders.

Subprime lenders work through some dealership’s special finance departments, and they aid bad credit borrowers. They take a look at your credit score, income, and overall stability to consider you for an auto loan. Finding a dealer with a special finance department is half the battle – and we can help with that.

At CarsDirect, we’re teamed up with dealerships across the country that work with subprime lenders. We match borrowers with these dealers, so borrowers with less than perfect credit can get financed for their next vehicle. To get started, simply complete our free car loan request form.

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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