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Let’s face it, most people cannot afford to buy a car with cash up front. Not a reliable

one anyway. That means auto financing is a necessary evil for most of us; and forget that sticker price, your credit will affect just how much you really end up paying for that car.

Though you may be able to get a loan with any level of credit, your credit rating will determine the interest rate you are offered and whether you are charged as little as zero to thousands of dollars in interest charges. Even your payment can vary by hundreds of dollars every month depending on your credit rating. Here is an illustration of the how the varying credit score ranges can impact your interest rate and payment on a $20,000 auto loan:

Knowing your credit score before you apply for an auto loan can be helpful in understanding what kind of interest rate and payment you will be offered, and ultimately the amount of loan you will qualify for.

Here are a few ways you may be able to improve your credit:

Check Your Credit Report for Mistakes

Check your credit report for mistakes that might be hurting your credit scores. If the different bureaus are reporting inaccurate balances, incorrect dates, late payments that were not late, or any other erroneous information, you can dispute the items with the respective credit bureaus and have the item corrected or deleted from your credit report.

Do You See Accounts That Do Not Belong to You?

It is not common, but some consumers have found accounts that do not belong to them included on their credit reports. If this happens is it possible that your consumer report was merged with a family member’s file with a similar name. Or someone else who may have a similar name or SSN. If there are accounts that cannot be attributed to a merged file, this may be a sign of identity theft.

How High Are Your Utilization Rates?

Credit utilization is the percentage of your current balances compared to your credit limits. If your balances are greater than 30% of your credit limits, you may be negatively impacting your scores. Lowering your balances to 30% or below will improve your scores. Maintaining a credit utilization rate of 15% or below will help you increase your scores each month.

Ask a Responsible Friend or Family Member to Add You as An Authorized User.

If a friend of family member with credit cards maintains good utilization and longevity is willing to add you as an authorized user, that account and its history will be added to your credit reports; you may experience a credit boost when those accounts appear on your credit.

If you have no other options than to purchase a car with bad credit, spend the next year trying to pay down your credit card balances and reducing your utilization rate; pay every account on time, every time. After 12 months, you should have experienced enough of a credit score increase that you can refinance your high interest loan into a loan with lower interest and a lower payment.

Remember, Boe Credit Consulting is here to help if you need it. We can provide you with a free credit consultation and we can also develop a custom and comprehensive plan to repair your damaged credit.

Contact Boe Credit Consulting today to learn how you can have the exceptional credit you deserve.


About the Author

Jeff Boe is a graduate of National American University, a Board-Certified Credit Consultant and the President of Boe Credit Consulting. He has successfully rehabilitated his own credit profile and, since 2005, has been working with consumers to educate and help them with improving their own credit.

In 2018 he started Boe Credit Consulting in order to help even more people improve their literacy as it relates to the credit system in the U.S. as-well-as to improve their credit reports and scores so they can be free to realize their financial goals.

Boe Credit Consulting specializes in helping credit-challenged consumers improve their credit reports and scores so that they can achieve their financial goals.

For more information, visit

©2020 Boe Credit Consulting


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