Rebuild Your Credit With a Car Loan
According to financial experts, about one-third of Canadians have a credit score that would be considered subprime. Fortunately, car loans are an effective way for drivers to rebuild their credit. Below, we’ve highlighted all the ways in which automotive financing can help turn around your credit and improve your score.
How Car Loans Help Repair Credit
When borrowers sign a contract for a car loan, they’re agreeing to make monthly payments for a set period of time. Because payment history has a significant influence on a borrower’s credit score, establishing a history of on-time car loan payments will significantly improve a driver’s credit score, and their ability to get lower interest rates in the future.
Car Loans Diversify Your Credit Portfolio
Automotive financing can help drivers diversify their credit portfolio, which illustrates to lenders that they’re reliably able to pay back both short-term and long-term financial obligations. To achieve this, borrowers need to have a mix of revolving and installment credit on their report.
Most borrowers have revolving credit through a credit card. Installment credit is gained through loans, paid over a set frame of time at select intervals. A car loan is a reliable and efficient way for borrowers to establish installment-type credit on their credit report, further boosting their credit score.
Find a Suitable Car Loan for Your Needs
While establishing a history of on-time payments via a car loan is a great way to rebuild credit, late payments can undermine the potential growth. Because of this, it’s important for drivers to find a vehicle and automotive financing plan that’s within their budget. An automotive finance expert, like the ones available at Southbank Dodge, can help drivers find a practical finance package that’s suitable for their situation.
Finance Your Vehicle Through Southbank Dodge
Interested in financing your next vehicle purchase through Southbank Dodge? Our team of automotive finance experts can help drivers explore their options, based on their vehicle preferences and current credit situation. Fill out the credit application form on this page to receive online pre-approval for financing. Upon submission, one of our team members will reach out to you to guide you through your next steps.