If you want to get approved for an auto loan at a reasonably low interest rate in Canada, you need a good credit score, or in other words, you must have a trustworthy credit history. If your credit score isn’t as high as it should be, it’s time to take necessary steps to get your score back in shape so that you can easily find lenders willing to approve your application for an affordable auto loan. Having a high credit score not only helps you get quick loan approvals but also makes it easy to get less expensive loans.
It’s important to mention here that you can still get approved for a car loan even if you have bad credit. Companies like Find My Auto help people get easy car loans no matter their financial standings. However, it’s better to have a good credit score showing your ability to handle loans in a responsible manner. If you have a low credit score, you should do your best to improve your credit score. But the question is how long it will take you to improve your score to a level where you can get quick and affordable loans.
How long will it take to repair your credit score?
How much time a credit repair process takes depends on your current score and history. It’s easy to plan ahead when you have a clear picture of what you need to do and when you should expect good results. Repairing your credit might take months or years. However, you shouldn’t give up.
First of all, develop an understanding of factors that impact your credit score. The overall length of your credit history, credit utilization length and how often you make payments on time are some of the notable factors that determine where your current or future score will fall between 300 and 850.
The average credit score in Canada is somewhere around 650. There are many Canadians who have below average score; they are called non-prime or subprime. An individual with below average credit score is likely to get loan approvals at slightly higher interest rates because of their being high-risk consumers.
While it takes a few months to considerably improve your score, you can do certain things to quickly repair your score. The increase of a few points on your score can be the difference between getting approved for a car at low interest and being rejected. Here are some measures that can help you improve your score to 200 points or more:
1. Pay off old debts
Settling old debts is one of the ways to get your credit score back in shape. Creditors are often willing to ease down terms and conditions in order to get the payments. You can have a good deal with your creditors and pay off your old debts with ease. Making all debt payments in full will also give your credit score a considerable boost.
2. Be wise when using credit cards
It is often recommended that using more than 30% of your credit limit isn’t a good approach. Just because you’re allowed to spend a certain amount on your credit card doesn’t mean you should spend without planning. Keeping your credit card spending no more than 30% of your limits will get your credit score up.
How long a default stays on your credit report may vary depending on your province. In some provinces, defaults for unsecured debts stay on credit reports for two years. This time period can extend to six years in Manitoba and Nova Scotia.
About Find My Auto
Find My Auto specializes in helping individuals get car loans with bad credit or poor credit history. If your score is below the 600 mark, you can still apply and get approved for an auto loan you can afford. Contact us for more information!