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Credit rebuilding strategies that actually work when trying to buy a car

Credit rebuilding strategies that actually work when trying to buy a car

If you have credit issues and need to buy a car, you should pay close attention to these tips from our Niagara Falls car loans team.

In Canada, the car loan market will become more complex with rising interest rates and lenders becoming reluctant to issue new loans to anyone with less than perfect credit.

Getting back to basics

The first thing you need to do is establish a credit score baseline; TransUnion and Equifax offer free access to your credit score and report.

If you aren’t already subscribing to these services, you should sign up ASAP.

When you have access to your credit reports, you need to look over each report and determine what the cause of your low credit score is.

Is there any incorrect information in your credit report?

Inaccurate information can lead to a low credit score; you can have these errors removed by following the dispute process posted by the respective credit reporting agency.

After you have addressed the errors inside your credit report, the next item is looking for accounts that are either past due or in collections.

The main reason that Canadians have a low credit score is not paying their bills on time.

You need to start putting additional money towards keeping these accounts up. The longer these accounts are past due, the longer it will take for your credit score to recover.

Raising your income to qualify for a larger car loan

Your credit score is important, but your income is equally important when trying to secure a car loan in Niagara Falls.

Lenders want to ensure you are earning enough money consistently to repay the loan as agreed.

Most lenders in Canada will not approve a new car loan if the debt-to-income ratio is more than forty percent, and this threshold may be reduced if the economy slips into a recession.

If your income is on the low side, you should think about asking for a raise at work or taking on another job to augment your income.

Having more than one source of income is ideal in these challenging economic times, plus the extra cash can go towards paying down your debts.

Selecting the right car for your needs

There are many different options available; the first thing you need to decide is whether you are going to be purchasing a gas-powered, hybrid, or EV.

When you have made that determination, then you can begin looking for a vehicle that will meet your current and projected needs.

The average car loan term is five years, so the vehicle you do select needs to meet your needs for at least that long.

Where to get a car loan approved today

If your credit score is weak, but you need a new car today, reach out to dealerships in your community that specialize in helping credit-challenged borrowers.

The dealership has credit experts who can show you how to rebuild your credit over the long term and knows which lenders will approve you today for a car loan.

You need to make the first move and contact the dealership right now; it is the best decision you will make today.

When you’re ready for a car lease or loan, get in touch with the Niagara Falls auto loan experts at Northway Ford for great deals on auto finance.

Categories: Car Loan

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