This must be a very exciting time. You have decided to jump into the pool that is car ownership. It is a whole new experience that you have definitely been waiting for. The convenience is almost here with you, shopping is going to be much more fun now. You have settled for a used car, obviously because of the price. But purchasing a used car can pose some challenges if you are doing it for the first time. This is an area that is filled with uncertainties and witty salesmen who will not hesitate from snatching something extra from your pocket. Luckily for you, we have taken the time to list what you need to do when financing a used car.
Why is it important to obtain your credit score?
This is a brief preview of your creditworthiness at any point in time. It changes from day to day, week to week, month to month and so on. It is important to check it before looking for a car financing deal as most dealers will want to see it as the first document before considering you. This will go into determining your credit status and the rates for which you qualify. To obtain your score, you can request online sources to provide you with your score for free. You only have to register.
Why is it important to obtain your credit report?
You should have your financials in order. Have whichever financial institution that you bank with do a credit check for you. This is what is used to assess your financial history. If you have little credit under your belt, get a credit card and start making purchases using it immediately, this will build you some positive credit. The positive credit is going to come in handy in the process of getting your vehicle.
What if my credit report is not so good ?
Polish it up! There are three credit reporting agencies, and each of them is prone to error. Do not take any errors in your report lightly. Visit the responsible agency and have them clear it up since it could cost you the opportunity to own a car of your choice. At the same time, you can clean up the legitimately bad side of your credit. Pay all accounts and update them, and pay off balances in collection. Do not take chances here.
What kind of installments should I choose?
Do not let expenses like sales tax and registration fees be rolled into your financing. These increase the amount of the loan while the vehicle in question has not increased in value, keeping you upside down on your car loan. Pay for these extras in cash to avoid getting into such a situation.
How fast should my payments be made?
Now, once you have been approved for car financing, you'll drive out of the parking lot of the car dealership. Most dealerships will require you to stick to meeting the deadlines strictly. This means that you have to make the payment schedules that the dealership sets up with the bank on or before the due date. By so doing, you remain in good books with the dealer, and the bank will give you a higher credit score. This will make it possible for you to take other credit opportunities in the future, so make sure you make your payments on time.