How To Avoid A Rejected Car Loan
When attempting to obtain car financing, it is important to check your credit score first. Borrowing money for car loans can be difficult if you do not have the minimum credit score necessary to obtain the loan. It can be a great disappointment to be rejected for a car loan because your credit score was just below the minimum credit score.
Proper Preparation Is Key
Success in obtaining the car loan depends on the steps you take to avoid a rejected car loan. Gain access to your yearly free credit report before shopping for a new car. The credit report will have all the necessary information to determine if you qualify for car financing. If the credit rating is in good to excellent standing, a car loan rejection is unlikely. People who have a credit rating below 630 may themselves automatically disqualified from borrowing money through traditional bank loans.
Get Your Credit Score Higher
If your credit score is below the 630 points target, it is time to work on repairing the credit rating in order to obtain a car loan. The first necessary step is to pay off all old debts that may be outstanding. The credit rating will not sky rocket because the debts are paid off, but it will help increase the credit score to the higher level that it needs to be to obtain a loan.
Errors are sometimes made on credit reports. If there is incorrect information on the credit report, it is essential to contact the reporting agency through the dispute center. There are three reporting agencies; therefore, it is necessary to contact all agencies if the error is on all three reports. The agencies will make contact with the company who reported the information to settle the dispute.
The change in the credit report should appear within a month, shortly after the dispute has gone in your favor. Companies must have your permission to run a hard inquiry. If someone ran a hard inquiry on your credit report, dispute it as soon as possible. Never give permission to anyone to run a credit report if it is uncertain whether you will be rejected for the loan. If you are rejected for the loan based on the credit report, it will have a negative impact on your credit and can remain there for the two year period. Guard your credit report as though your life depended on it.
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