Everyone likes to save money. Auto loans can carry significant financial burdens for many people. If you are looking to buy a new car at Northwest Chrysler in Houston, chances are you will need a loan. The good news is there are several things you can do to lower that burden before buying the car! Below are some tips to save money on your next auto loan!
The best way to save money on your next auto loan is to improve your credit score. A higher credit score means a lower auto loan interest rate. There are four basic tips for raising your credit score.
Regularly check your credit report
The first thing each and every individual should do before applying for an auto loan is to get their own credit report. Checking credit reports for accuracy should occur once a year. If there are any mistakes that negatively affect your credit, corrections can take up to three months to fix. Staying on top of these mistakes will save you a headache in the long run.
Reduce credit card balances
An important factor in your FICO credit score is the ratio of owed amount to the credit limit. If you have over 25% of your credit limit owed, this could lower your credit score. Try to limit the use of credit cards if this is your problem. Pay bills timelyPaying bills on time is one aspect of good credit in which most people are aware. Be sure you make timely payments on bills especially close to the time you apply for a loan. A late payment six years in the past will not affect your credit as heavily as a late payment in the present.
Pay off debt
Many credit cards offer appealing balance transfer rates. Do not fall victim to these rates around loan time. If you cancel a credit card and transfer it’s balanced over to another credit card, you are increasing the debt to credit limit ratio. As stated earlier, this is not a good thing. Instead of transferring debt, work on paying off that debt before applying for an auto loan.
There are many reasons why improving your credit score is so important. Saving money on auto loans is just one of the many benefits of having great credit. Improving your credit not only improves the health of your current financial situation but sets you up for future financial success.
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