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If you have bad credit scores then using a car loan to improve your credit score can dramaticallty improve your financial situation. So, if your ultimate goal is to improve your credit scores then the first thing you need to do is get a copy of your credit report and have a look at it.
Find out whether there are any past mistakes in the copy, either from your side or from someone else and if you find some errors immediately report to the concerned agencies. In case companies have reported things incorrectly then make sure you contact them to get the issue changed.
The things you should look in your credit report include overdue accounts which have already been paid off and also the limit of your credit cards. This is because one of the factors in calculating your credit score is the amount of credit cards you have along with the amount you have used.
Moreover if there are any issues from the past such as overdue payments then they need to be paid off soon. You would not just be fixing these part problems to improve your credit ratings but also to get your finance looking better for the next financing application.
The better credit history you have the better interest rates you would be offered. A car loan can help you in a great way to improve your credit. This means that when you make timely payments for the car loan it can greatly help your credit scores.
Although most of the car loan companies do not accept bad credit holders for a car loan you can still benefit from the same but at higher interest rates.
The car loans with higher interest rates can still benefit you as it would give you a change to prove your ability to make the payments on time. When you have cleared all the debts in car loan it will surely leave a positive mark on your credit report which can help you in a great way then next time you need financial help.