Graduation can be a special time forÂ students. Their lives are headed in a new direction, which can be exciting. However, graduates who want to secure various types of loans after school, including those for cars, should know their credit needs to be in pristine shape to be approved by lenders.
Those with poor credit especially may want to take this into mind, considering that a number of dealerships and lenders across the country require a minimum credit score to qualify for the purchase of a vehicle. The good news for these consumers is that credit repair can do wonders for them.
Take the time to review your credit report
Prior to working with professionals who can help them get back on their feet in terms of good credit standing, new graduates ought to order a free copy of their credit report. Just as numerous consumers do when they want to secure mortgages, credit cards and other major loans, former students will want to read this document thoroughly before approaching autoÂ lenders.
Errors on this report are quite common. From wrong numbers punched in for Social Security numbers and owed debt to having someone else’s debt listed on the document, there are several items on there that could be mistakes. Thus, taking the time to read over all debts listed and other key information on the report is vital.
Alter your spending and saving habits if needed
Another area that you might want to focus on to ensure your credit is up to snuff when looking to obtain a car loan is your budget. Many graduates may like to spend a decent amount of money on going out to eat and other entertainment, and charge all of it to their credit cards. However, this can be a big mistake – particularly if they don’t plan on paying off their balances each month in full and on time.
A chief way graduates can alter their budgets accordingly is to make a list of everything they typically buy in a given week and month. Assuming they’re living on their own and not with mom and dad anymore, that will likely mean they’re spending money on groceries, utilities and rent. Any spending that doesn’t go to these expenses could be considered unnecessary. Thus, grads would be wise to cut out some areas where they often allocate some credit card purchases.
Begin the search process once credit is better
After taking the time to work on fixing their budgets, errors on their credit reports and working with a credit repair law firm to shore up their standing, these new members of the “real world” can head to the marketplace to find their new vehicle.
Just as they carefully go about fixing your credit, they will want to be equally as savvy about looking around for the right car for them. This includes being sure to shop around at various dealers in their area and having a hard-line top price they are willing to pay for a new ride.
Having improved credit means you can be offered, in all likelihood, better loan terms for a vehicle purchase, which can be a major plus. After all, low interest rates over the life of their loan could mean less stress about their monthly payments.
With credit standards at lenders nationwide loosening up, there is a good chance that with a solid score, graduates could secure the car of their dreams.