How to Tighten Up Your Credit

Dec 12, 2023 By Susan Kelly

Your score on credit determines the conditions of your loan. If you have excellent credit, you get the lowest rate of interest. If not, you'll pay more because of your uncertain credit record. If you're struggling with your credit score and aren't required to purchase the car you want today, you should wait until your credit score improves. A small improvement in your score could help you save a significant amount of cash throughout the loan.

Don't Borrow too Little

If you're only looking for a few thousand dollars, do not apply for auto loans. Instead, you should save the money (if your car purchase can be delayed). Small loans can be paid off much faster than larger loans. Because the interest charged on a loan is the method banks use to make money, they won't wish to get your loan back quickly.

As a result, the smaller loans typically come with higher interest rates than loans with a larger amount. This allows banks to earn a higher amount of money from you. Of course, there are times when automobile purchases are an emergency, and the only solution could be to go with the quickest option. Make sure that your loan limit is $5,000. Anything below the amount must be taken out of your account for savings. If you're sure that you'll need a loan, you might use the auto loan calculator to figure out the interest rate you can manage.


Anyone who has a home is aware that when rates for mortgages fall dramatically, refinancing your home is a good idea and makes sense. The thing that many consumers aren't aware of is that they could also refinance their vehicle. It lowers the cost of your monthly payments and lowers how much interest you're paying, which will allow you to get your car paid off sooner. The value of cars decreases rapidly, making it essential to get your loan paid off quickly.

How much does it help you save? You took out an interest-free loan of $16,500 over 60 months with a 21% interest rate because you had not had the best credit. The loan would cost you $446 per month, and you'd have to pay around $10,300 for interest over the loan course. If you refinance the loan and receive an interest rate of 7, your monthly payments would reduce by $330 over a month. You'd only pay more than $3300 in interest. What can you do with $116 each month? It's good to include it in your existing vehicle payment to be more quickly paid off.

Don't Stop at the Dealership

Like your dealer is a middleman when they sell you an automobile, they are also a middleman when they try to provide you with either a lease or loan. Middlemen are compensated for their work, and the one who is paying will likely be you. It is a must that you obtain a quote for financing from the dealer. However, should you not do that, you could pay more to get your loan. You likely did some research about your vehicle. The same applies to your credit.

Lease It

A car you lease is usually thought of as a poor idea because you're paying the monthly cost and won't have ownership of the vehicle. Is leasing not as bad as it is claimed to be? If you're looking to buy a new car every couple of years but don't want to cover the costs of repairs associated with owning a vehicle for a long time, leasing might be the right choice for you.

In addition, the monthly payment is lower, but in the majority of states, you charge sales tax only on your monthly payments instead of the entire amount of the car. Because a lease is intended to charge you for using the vehicle instead of purchasing it, you don't pay the full amount of depreciation for the car. The leasing option is not for those who want to have the automobile when the payments are all completed; however, leasing might be a suitable option for you if you prefer not to own an automobile.

Buy a Cheaper Car

It's an obvious and not too profound suggestion. However, it's not as obvious as many believe. The facts are obvious; in America, the population has an unnatural habit of buying things they cannot be able to afford. They are reliant on credit, which could lead to financial catastrophe in a life-changing incident. The worst part is that our nation's assumption regarding finances is that it's okay to be in debt for most of our lives as adults.

Are you required to purchase an entirely new vehicle or a second-hand model that you bought the past few years to satisfy your needs for a vehicle? Do you require an expensive car? Have you truly "earned the right" to purchase a costly vehicle that could increase your debt? This might seem like an obvious suggestion, but it's something worth taking a look at seriously.

Related Articles