How a Buy Here Pay Here Car Dealership Can Improve Your Credit Score
Yes, You Can Build Your Credit When You Buy a Used Vehicle
Having a strong credit score is extremely important. With no or low credit, it can be difficult to get approved for loans on major purchases, like a car or home. Sometimes challenged credit can make it difficult to get a job or an apartment lease!
If you have a poor credit history, you aren’t completely out of luck. Purchasing a buy here pay here car can help rebuild your credit score, and is a great option if traditional lenders refuse to loan you money for a reliable vehicle.
By simply driving your buy here pay here used car and making on-time payments, you can improve your credit score and set yourself up for success. If this is your first time hearing about a buy here pay here car dealership, or if you’re still skeptical, this guide will review everything you need to know so you can begin growing your credit and enhancing your overall quality of life.
What Is a Credit Score?
Your credit score represents your credit behavior and uses past reports to determine your likeliness and ability to repay a loan on time. Your credit score can affect whether lenders decide to offer you a loan, whether it’s for a car, credit card, or a place to live. It also impacts your loan interest rate and credit limit, if you are ultimately approved to borrow money.
What Affects Your Credit Score?
To begin improving your credit score, it’s important to know where this number comes from in the first place. Your credit score is made up of five factors:
Payment history contributes the most to your score, and shows that you make payments on time.
Amounts owed refers to how much debt you currently owe. Less outstanding debt can boost your credit score.
Length of credit history is the amount of time you’ve had the credit account. The longer your account has been open, the higher your credit score will be.
New credit also plays a part in your score. Credit inquiries, or credit checks, cause your score to decrease, so you’ll want to be intentional about how often you apply for credit.
Lastly, using a variety of credit - your credit mix - helps improve your score.
Can I Purchase a Car with My Credit Score?
To receive an auto loan from a traditional car dealership, you must meet or exceed their credit requirements. Most dealers accept credit scores over 600. This makes it difficult for drivers with low or no credit to buy a car.
Fortunately, pay here buy here car dealerships provide these drivers with a chance to get behind the wheel and build their credit at the same time, considering only your monthly income in whether they will extend you an auto loan.
What Is a Buy Here Pay Here Car Dealership?
Buy here pay here car dealerships sell used cars like any other dealership. Where they differ, however, is the financing. Car dealerships with buy here pay here financing work in-house only, meaning you receive a loan directly from the dealership. Instead of making monthly or weekly payments to a bank or auto lender, you pay the dealership directly.
These dealerships assess your ability to repay your loan by your monthly income - not your credit score. By purchasing a buy here pay here car, drivers with poor credit history are able to improve their score.
How Your Car Can Improve Your Credit Score
Because a pay here buy here car dealership operates differently than a traditional dealership, you can still purchase a car even with poor credit history. A buy here pay here car is a simple way to repair any credit mistakes you’ve made in the past.
After you put a down payment on a buy here pay here car, you’ll have the option to make weekly or monthly payments back to the dealership. Your on-time payments are documented and reported to major credit bureaus, which increases your credit score over time.
Grow Your Credit Score at a Buy Here Pay Here Dealership
Car dealerships that offer buy here pay here financing help you improve your credit score over time, so you’ll want to get started as soon as possible. Most buy here pay here car lots offer vehicles from the top auto manufacturers, so you’ll have no problem finding the make and model you’re looking for. You can expect to find a variety of used cars, trucks, and SUVs for an incredible price.
Learn more about purchasing your own car and building your credit by visiting a buy here pay here car dealership near you. Once you arrive, a staff member will help you apply for financing and answer any questions you may have. Soon enough, you’ll be on your way to a higher, stronger credit score.
