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.
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