5 Steps to the best motorbike loan

It is well known fact that financial institutions take your credit score into consideration before approving a motorbike loan. Nevertheless, many people disregard this, although it impacts the term of their motorbike loan as well as the interest rates assigned to the loan.

If you are aiming for lower motorbike loan rate, it is of great importance that you consider your credit report as a picture of a risk you can represent to your lender. Your credit score is basically a benchmark which is used to evaluate and assign a risk factor to you. This affects you when applying for any loan, as well, and especially a motorbike loan, being this is a high risk loan. Factors of your credit alter your credit score every day. Before engaging in a motorbike loan, review these five steps that are adduced. They are designed to help you improve your credit score and as a conclusion lead you to the best motorbike loans with lowest interest rates.

Watch your debt

This is a very important factor. Although banks are competing to loan you money and get more clients, they are aware of the risks that defaulters bring. You should always keep your account balance under 35% of your credit limit. Many financial institutions take credit card debts as risky and may not easily approve your motorbike loan. Even if they approve, you may be certain that you will not get the best rate on it. Here is an example. If you have a credit card with a limit of 10 000$ you should keep your debt below 3 500$ when applying for a motorbike loan.

Make your payments on time

Regular payments provide you a positive score in your credit report. Motorbike lenders don’t like people with debts. It’s that “LATE” notice in your credit report that raises your interest rate. Be very cautious of this. Make your payments on time, at least a few months before applying for a bike loan. This will give you more time to gather up some money to have a bigger equity in your car as well. If you have a period of time with no debts and no stray and unpaid bills it will be shown as a big plus in your credit report and will increase your credit score.

Establish your credit early

Time is an essential factor of your credit report. Thus, it is advised to start your credit build early. Having one or two credit cards can help you greatly in that. There is a catch in this. If you have small and frequent purchases and, most importantly, a positive balance at the end of the month, this strategy is set to succeed.  Lenders love their clients with unused money on their accounts. You should always keep your oldest account. As we mentioned, the length of your credit history can gather more facts and bring you to positive score and that makes a great difference in your approval for a motorbike loan.

Avoid excessive credit inquiries

When you apply for a motorbike loan, it is normal that you will be asked for a driver license or SSN (social security number), so the lender can perform a credit inquiry. If you do this on more places than one, it will bring a negative score in your credit report. Compare prices and offers at your bank as well as dealerships and other financial institutions. When you find the one that soothes you THEN apply for a motorbike loan.

Check your credit regularly

Online credit check is now available and offered by many creditors. Make sure you check it frequently (at least once a month), so you can perceive and point out any inaccuracies that you might find. If you find any inaccuracy, contact your creditor immediately for the repair and reevaluation, so that it would not grant you negative points in your credit report.

Remember, credit score is by far the most important thing you should always keep your wits about. Many people are afraid of loans because they cannot handle their money well. If you have your credit score taken care of, you will open many doors in your life. Loans are meant to help people fulfill their dreams and should not be considered a necessary evil. Review these steps thoroughly and you will be on the right path for buying your dream bike in time.