Today we discuss how an auto loan can help build your credit.
Auto loans have a twofold benefit for someone with credit challenges in the past.
The first is that you get a vehicle that suits the needs you require it it for whether it be driving yourself to the grocery store. But it also serves the purpose of building or rebuilding credit depending on your credit history. What is meant by this is, to build or rebuild credit history there needs to be something positively reporting to your credit bureau of significance. This means gaining a credit card and following our previous tips on how to use it wisely, but also gaining credit for something of higher value. In our case, auto loans. Auto loans tend to be higher than a credit card limit, this means when you take out an auto loan it is for a larger amount than a credit card would offer. As you continue to make payments on time you are building yourself positive credit history with a large amount of money. Auto loans are an easier loan to build credit with a larger amount of money s the repayment is scheduled and the amounts are the same for each and every payment. For this reason, making payments is not only easy for you, but also demonstrates to lenders your ability to act responsibly with larger loans.
Check in at the end of the month for more credit information!