Poor credit history can be a barrier in the getting loan at any time. Rebuilding the damaged credit history is a must to take the step to ensure that you have the option of availing money at the time of need.
However, rebuilding the credit history requires a lot of time and persistence on one’s part. This might come as a surprise to many, but the decision of buying a new vehicle and taking the loan for the same is actually a smart way to rebuild the credit history.
Read below to know how this exactly works:
- Secured way:
For lenders, the decision to give loan becomes easier by the fact that their credit is secured by the vehicles. Also for someone with poor credit history, getting a car loan is easier than other loans because the car dealership has many lenders as their working partners with the competitive interest rate. This will eventually help you in building a good credit rating over the period of time.
- Controlled spending:
One-way ‘vehicle loan’ helps in rebuilding credit history is by limiting your financial spending to a fixed amount per month, which is under your control. You need to understand that this is strictly a means to rebuild your credit ratings.
- Sticking to timelines:
Once you are determined to make your credit history better, make sure you are not breaking a single rule. If your payment due date is 15th, stick to set, come what may. Don’t get tempted to extra days in the form of grace periods as your purpose is different from what grace period actually offers.
Click here to look for best options for someone looking to rebuild the credit scores.
- Car Title loans:
Your chances of being approved for a car title loans are more than other financial institution loans. Once you have obtained and paid off the car title loan, it helps in a dual way. Firstly, by making you eligible for other loans (like personal loans and other traditional loans) and secondly improving your credit history.
- Building trust in creditors:
One of the hurdles in getting credits for financiers is the ‘trust factor’ post credit history damage. One should begin with regaining that trust by paying off your car title loan timely and making creditors believe that you have the intention and capability of paying off the loan and by giving you credit, they aren’t doing any mistake.
- Don’t repeat the mistake:
Obviously, the most important factor which will help you in building the healthy credit score is not repeating the mistakes of non-payments, delay in payments and intentional defaults. Never lose the option of ‘availing credit’ because you never know when you might need one.
Having a damaged credit history is something one should avoid at the first place. However, it is not the end of the world. There are options out there to help you give a fair chance of re-building your credit history. Spend some time in making a strategy of getting back to a healthy credit history.