If you want to buy a vehicle, house, or many other items on credit, you must have a good credit rating. When you have a good credit score, you can get approved for loans, credit cards, and other financing. You also pay a better interest rate if you have a higher credit score. If you have bad credit because of past issues, you may find it difficult to get approved for financing. Here at Premier Clearance Center Metairie, we give you a chance to build credit if you live in Kenner, Gretna, Chalmette, or nearby areas.Get Pre-Qualified!
When you get approved for a car loan, it has an impact on your credit rating. The lender will make an inquiry on your credit history, which can lower your score for a short time by a few points. Once you’re approved for a loan and make several payments on time, your credit score will start to improve. By the time you have paid off the loan, your score should be much improved as long as you don’t have any other new negative information.
Your credit score is made up of several factors. Your payment history has the biggest impact. Late payments and other delinquencies will lower it with each negative listing subtracting from the score.
Credit utilization ratio is another important factor. The ratio includes how much credit you have against how much is being used. The goal should be to use less than 20 percent of your total credit. For instance, you may have a credit limit of $1000. If you purchase something with it for $200, you have only used 20 percent. If you max out most of your credit, it will lower your score.
How long you have had credit accounts will also influence your score. Older accounts will have a positive impact while opening new accounts will reduce the score. If you have a lot of new credit, such as multiple credit cards in the past few months, it can cause your score to drop.
The type of credit you have will impact your credit rating. It’s best to have a variety of credit, such as credit cards and loans. Loans are installment credit while credit cards or a line of credit is called revolving credit. Revolving credit is a bigger factor on your total score.
While a car loan is an installment loan, it does play a part in helping you build good credit. When you make payments on time, it will show the account as current. The more current accounts you have, the higher your credit rating will be.
If you want a chance to rebuild your credit or build new credit, you can apply for financing with Premier Clearance Center Metairie. Fill out our online application to find out how much you qualify for. Our sales team will help you find the right used vehicle for your lifestyle and for your budget.