How Financing a Used Car Boosts Your Credit Score

May 27th, 2020 by

You might be thinking that getting a used car on credit is just a necessity to get you on the road in a reliable vehicle. But something that many people do not consider is the effect that buying a used car can have on your credit. In fact, if you pay your car note as agreed at the time of purchase, your credit could get a big boost.

The effect that your car note will have on your credit depends on several factors. First, it depends on whether or not the lender or company reports to one or all three of the credit reporting agencies. If they only report to one bureau, it is possible that your credit will not reflect the positive activity when run by another lender or creditor.

In addition, your activity on the account can play a huge role in how your credit will be affected. You need to pay your car note as agreed for it to boost your credit. You can also improve your credit by paying off the financing early. But often the negative aspects of a car loan can mean a bigger difference.

In fact, if you make your payments late or get more than a month behind, it is entirely possible that your credit could take a big hit. This is especially true if you are fighting against having no credit rather than bad credit. The less you have on your credit report the more of an impact your car loan is going to have on your credit.

If you are looking for a credit solution to buying a used car, contact us today for more information.

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