Did you know that getting a bad credit car loan may actually save your credit score? We know it may seem a little backward, but it’s true! And when you think about all of the factors that go into creating your credit score, it actually makes perfect sense. Here’s why:
Your credit score is a basic report of your credit standing. That credit standing is established based on your credit history – or all of the financial decisions that you have made. The better the financial decisions, the higher the credit score. Therefore, by making wise financial decisions, you’ll have a higher credit score and a stronger credit history.
However, there are so many factors that go into making a credit score, that financial decisions alone don’t necessarily account for 100 percent of your credit history or score. For example, you job and address may also make a significant difference. And, if you’re like many people and transfer locations because of a job, your credit score might actually suffer because of those transfers.
So what can you do if you have found yourself in a situation in which you have bad credit? Well, first, you can remember that you’re not alone. Many of our clients have bad credit through no fault of their own – or through fault of their own that they are now ready to remedy.
If you’re ready to turn your credit around so that you can start to develop a good credit history and increase your credit score, you can get started by doing all of the things that people with good credit do. One of the first things you can do is take out a car loan and then repay that loan on time each month.
A car loan is a great way to begin to rebuild your credit. When you take out a bad credit car loan, you’ll not only be on your way to owning an asset that can increase your wealth, but you will also have a very practical tool that you will be able to use every day to get to and from work, school, the grocery store, and more. Plus, that car loan will help to show future lenders that you are capable of being financially responsible.
Remember: even if you take out a bad credit car loan today, you can always refinance that car loan down the road as your credit improves. Therefore, taking out a bad credit car loan is a win-win situation on all accounts and will set you up to have a better financial situation down the road!