What are some of the steps to rebuild credit score before purchasing a Chevy vehicle?
If you have ever been in a spot to buy a new car because yours is no longer usable or you simply just need to buy a car for any reason… Unless you are paying cash, having credit is a must.
It is a hard pill to swallow when you are at a dealership and you have found the perfect Chevy vehicle, the Chevy dealership salesman is excited to have the dealership run your credit just to not find you approved.
Your friendly and helpful car salesman says to you, “I am sorry, your credit application is not approved today, but you can build your credit and come back in the future and we can find the perfect car for you at that time.”
I will give you a guide as to how you can build your credit so that next time you go to put the credit application through, you will be approved.
If you want to be approved to buy a car in Canada you need at least a credit score of between 630 and 650. Credit scores range from 300 to 900.
Here are your credit ranges.
Excellent: 800 – 900
Very Good: 720 – 799
Good: 650 – 719
Fair: 600 – 649
Poor: 300 – 599
With your auto lender needing to see your credit score at least in the range of 630-650, there is some leeway around the requirements that are needed when you seek to obtain a car loan.
Here some tried and true tips to improve your credit score to buy a car
Obtain a secured credit card.
- When you are trying to build your credit you need to have credit and use it. If you do not have any credit and or your credit is bad, you can get a secured credit card. With a secured credit card, you will have to preload it, and if you cannot make the payment on time, the issuer of the card will simply take the payment from the money you have preloaded on the card.
- Once you show that you can pay on this for some time, your credit score will rise and you will be able to apply for a smaller limit unsecured credit card. When you do this, you need to be able to make a purchase of a few hundred dollars and be willing to make smaller to minimum payments.
This does two things:
1 – You are willing to pay credit interest.
You need to show that you are willing to pay the interest. This gives creditors more incentives to want to issue you more credit because if you show you will pay on the interest and are willing to make their money, they will be happy to give you more credit and higher maximums.
2 – You show consistency in making your credit payments.
Paying smaller or minimum payments on time and regularly will show the creditor you are responsible and the reason you want to make smaller payments over a longer period is that over a longer amount of time shows that you can be consistent in making your payments. For example: If you have a $500 maximum on your card, you would need to be able to pay your card down over a longer period of time.
Have more than one credit base
If you have more than one credit card or line of credit that you are being consistent in using and paying on, this will help you more than hurt you.
Two things to keep in mind when you do this is…
1 – You need to make sure you do not apply for too much credit.
Applying too much shows a lack of patience and is irresponsible. This can hurt your credit score more than help it.
2 – Keep a lower balance on your card but do not keep it at zero.
You need to show you are willing to make your payments and be consistent with that. This will show you are responsible to your creditors over time.
One more thing to keep in mind…
Save up a decent down payment
- If you bring at least 10% down to buy your new vehicle, the banks will give you better terms and better interest rates in your approval process versus if you did not front any down payment.
If you do all these things, your credit score will climb over time and you could be driving the new Chevy of your choice.