Want to get better terms when you apply for financing? Be sure to check your credit score beforehand. Your credit score will determine whether you qualify for financing in the first place. Your credit score will also give you an idea of the interest rates you’ll likely receive from lenders and financing institutions.
Why You Need to Check Your Credit
Your credit score is one of the first things that lenders look at when assessing your credit history. If you have a high credit score, you can qualify for higher financing with lower interest rates. You can also be granted lower monthly repayments. In the long run, this will save you hundreds of dollars in interest payments.
In contrast, a low credit score makes you a risky borrower. Your loan application may have little chance of getting approved. Even if it is approved, you’ll most likely be given interest rates higher than standard rates. You may even be asked to get a co-signer for the loan.
This is why it’s important to check your credit before applying for one. You can improve your credit score first to ensure that you get the best terms possible.
How to Check Your Credit Score
You can purchase your credit score from any of the three major credit bureaus in the U.S. Equifax, Experian, and TransUnion provide annual credit reports for free, though these reports don’t include your credit score. There are also other agencies and websites that provide credit score services for free, or with a monthly subscription fee. Getting a monthly report is a good way to monitor your credit score and will enable you to maintain good credit standing.
Some credit card companies and financial institutions also provide credit scores for their customers. Go through your credit card statement or loan statement to check if it indicates your credit score. If not, log in to your account to check if you can obtain your credit score from there.
Get Credit Repair Services
Your credit score significantly impacts the amount you end up paying or saving through financing. So once you get your score, do what you can to increase it before applying for a loan. Start paying your bills on time and avoid going over your credit limit. Request for a credit increase but keep your spending low to gain a lower credit utilization rate. Keep your debt low and ensure monthly payments are on time. Check your credit score monthly to see if it’s improving, and determine what else you can do to increase it.
If all this sounds daunting or overwhelming, get help from a credit repair company. These companies can advise you on what you can do to get a higher credit score. They can also negotiate with creditors on your behalf so you can get better terms with competitive rates.
Once you have a credit score of at least 700, you’re more likely to get a good deal on your financing. If you can aim for an excellent rating of 800 to 850, you’ll be able to get the best rates possible.
Source: https://www.istockphoto.com/photo/credit-repair-form-in-a-clipboard-bad-credit-score-gm
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