Koons Woodbridge Hyundai

May 1, 2023

Thursday, 12 August, 2021

If you’re planning to buy a vehicle in Woodbridge, Virginia, you’ll probably need to get an auto loan. Your ability to secure financing largely depends on your credit score. However, having a poor credit score doesn’t mean you should give up on your dream car. Check out this helpful guide to fix your bad credit and get approved for a car loan.

Why Does Your Credit Score Matter When Applying for an Auto Loan?

Your credit score is one of the main factors that auto loan providers take into consideration when determining whether they should approve your loan application. This is because your credit rating is an indication of your ability to consistently make your monthly payments and eventually pay off your loan.

Major banks tend to have stricter credit requirements than credit unions and private lenders. If your credit score isn’t so good, a lender will have to take a bigger risk in providing you with a loan. Therefore, you can expect to have a hard time getting an auto loan with bad credit.

Besides reducing your loan approval chances, a low credit score can also affect the interest rate on your auto loan. Even if you manage to find a lender that will overlook your bad credit, you can expect to pay a significantly higher interest rate. Increasing your interest rate is a way for the lender to compensate for the extra risk they’re assuming.

How To Repair Your Bad Credit

Improving your credit score is the best way to boost your chances of getting a car loan and keeping your interest rate low. Some of the things you can do to fix your bad credit include:

Check Your Credit Reports for Errors

Although they’re usually accurate, your credit reports may sometimes contain errors that can bring down your credit score. So, if you’ve been meeting your loan obligations but your score isn’t as good as it should be, it may be worthwhile to review your credit reports.

Once a year, you’re allowed to ask for a free copy of your credit report from the three main credit agencies, which are TransUnion, Experian, and Equifax. Carefully go through your credit reports and look for mistakes such as duplicate accounts, wrong account statuses, inaccurate balances, and incorrect delinquent payments. If there are errors on your credit reports, disputing them is one of the easiest ways to boost your credit score.

Make Payments on Time

Your payment history is probably the biggest factor impacting your credit rating. When you’re trying to rebuild your credit, you can’t afford to have another late payment listed on your credit reports. Bear in mind that late payments will remain on your reports for seven and a half years, making them more difficult to recover from than many other negative items. As such, you should try your best to pay your bills and lines of credit on time. Even if you can pay only the minimum, it’s better than being late or missing a payment.

Keep Your Credit Utilization Rate Low

Credit utilization refers to the percentage of overall available credit you’re currently using. The lower your credit utilization, the higher your credit score. Most experts recommend using no more than 30% of the limit on any of your credit cards. Check the credit utilization rates for all of your cards and try to bring down the highest ones. Your credit score will improve when your credit card issuers report lower balances to the credit agencies. Once your balances are reduced, past high credit utilization won’t hurt your score.

Apply for a Secured Credit Card

Typically, a secured credit card is meant for people who are building their credit from scratch. It may be a good idea to get one if you’ve canceled all of your credit cards. This type of credit card works like a regular credit card, but it requires a deposit upfront, which is usually the credit limit. Choosing a secured credit card from an issuer that reports to the major credit agencies can help raise your credit score.

Become an Authorized User on a Credit Card

If possible, consider asking a family member, relative, or friend to make you an authorized user on their credit card. Even if you don’t access their credit card account or make any charges, your credit score can benefit just from you being on the account. However, you should note that the effect on your score may not be significant because you aren’t responsible for paying the debt on the account. Also, becoming an authorized user can hurt your credit if the person who holds the account fails to pay bills on time.

Get Auto Financing With Bad Credit at Koons Woodbridge Hyundai

If you have difficulty improving your credit score, you can try getting auto financing at Koons Woodbridge Hyundai. The finance center at our dealership has strong relationships with many banks, credit unions, and alternative loan providers in the Woodbridge area. Therefore, we’re able to offer a wide range of financing plans to suit the specific needs of different car buyers, including those with bad credit. Regardless of your credit score, we can assist you in securing a great financing deal that enables you to enjoy your favorite car with complete peace of mind.

Besides offering cost-effective, personalized auto financing, our dealership also strives to take the hassle out of the car-buying process by providing our customers with an array of online financing tools. You can use our monthly payment calculator to find out which new Hyundai model or used vehicle best fits your budget. Then, fill out our online car loan application form and get pre-approved in no time.

Don’t let your bad credit stop you from owning your favorite car. Whether you’re looking to buy a new or used vehicle, rest assured you’ll find your ideal car and financing plan at Koons Woodbridge Hyundai. Feel free to contact us if you need more information about our auto financing solutions.


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