We here this one all the time:
“If I am going to be making payments, it has to be a car that I want.”
Let’s be honest here: the majority of people with serious credit challenges are not able to buy their dream vehicle with the down payment they have available.
Generally speaking, the worse your credit is, the more a lender is going to control the vehicles you are able to purchase and the higher your interest rate will be. As your credit improves, you are able to qualify for more vehicles and better interest rates.
How to Improve Credit:
There are basically two ways to improve your credit. You can either get new, positive, accounts or remove negative items from your credit.
Nothing is as effective as obtaining a large installment loan, and paying it ON TIME each month. Auto loans, personal loans (if you can qualify), and mortgages seem to work best. Credit cards and other revolving lines of credit are not as effective.
To remove negative items, the process can be a bit more complicated. You have to repeatedly dispute items on your credit bureau with both the creditors and each credit reporting company (there are three of them). Eventually, some of the items will go away, no matter who disputes them.
The part most people do not know: Companies that specialize in repairing credit are generally much more effective than individuals who try to do it themselves. Why is that? It is their job. They do not forget to dispute because their kids distracted them. They do not forget to follow up with each individual dispute because they are tired, or had to go to a party, or wanted to watch a movie. Most people just do not have the time to stay on top of the credit repair process.
The Magic Formula:
New Good Loan + Credit Repair = Faster Credit Improvement
The fastest way to see the biggest improvement is to simply combine building new (good) credit with repairing old (bad) credit. This formula gets you into a vehicle you can be proud of and a loan you are happy with much sooner than just doing credit repair or obtaining a new loan.
We have customers that refinance or trade in to a better car in less than six months. Really. Six. Months.
There is no hard and fast rule. Some people will take longer, but if you make on time payments for your new loan, work on repairing the existing bad credit, and do not add new negative items to your credit, YOUR CREDIT WILL IMPROVE. Credit is a marathon, not a sprint. We are just trying to help make it a faster marathon.