If you’re looking for a used car with a financing situation, credit score is going to be an important factor. Your credit score will go a long way to determining which kinds of financing situations you’ll be eligible for, and the used car values you can look into.
At Auction Direct USA, we have financing options available for folks with all levels of credit score. Those with higher scores, though, will typically have many more good options available. Here are some tips for keeping credit score high ahead of financing a used car.
20-10 Rule
Many financial advisors will recommend a very basic rule for credit, title the 20-10 rule: Never let credit card debt run higher than 20 percent of yearly post-tax income, and never use more than 10 percent of your individual monthly income to pay down credit card debt. Staying within these limits, or even tighter if possible, will keep certain debt rates that are vital to credit score from swinging too far in any particular direction.
No Late Payments
Late or missed bill payments are some of the simplest ways to lower your credit score – the vital credit bureaus track on-time payment rate, and dock you heavily if yours is too low. Online bill payment makes this a completely unacceptable outcome in today’s modern age; simply set automatic payments up for any areas you frequently forget.
Emergency Funds
If you can, try to keep at least 15 percent of your credit or more open at all times in case of emergencies. If you’re forced to max a card for an emergency or one-time event, this could heavily damage your credit score.
Easy Debt
Much of credit score has to do with how well you consistently use your credit, but then also pay it down in an acceptable time period. For this reason, a quick way to goose your score a little is to take on a bit of “easy” debt – debt you know you can pay easily, and may have otherwise not even put on your line of credit. Repaying this debt early and without missing any payments will help raise your credit.
Want to learn more about credit score and how it factors into your next used car purchase, or interested in our wide availability of used cars? Speak to the experts at Auction Direct USA today.
