The best time to work on getting a good deal on your loan is well before you are going to need to get that loan. When you apply for a loan, the loan company looks at your credit. They make their decision based on your credit history. You can get a larger loan and lower interest rates if your credit score is good. So, what can you do to make sure that you are ready to get that loan when you want to get it.
Check Your Credit Reports
There are three credit reporting agencies, Experian, Transunion, and Equifax. You can request a credit report from each of these agencies once a year. It's a good idea to do because you can make sure that whatever is on your report is actually yours. You can compare the three reports and see if they all agree. If there is something wrong on one or all of them, you can contest the issue. If you contest any mistakes, the credit union will investigate the matter to see if it is correct.
Get Rid of Some Credit Cards
You don't want to get rid of all your cards, just cards that you don't currently use. If they are just sitting in your wallet, they aren't doing you much good, so go ahead and close out those cards. If you are carrying a high balance on any of your credit cards, work on paying them down. One way you can do that is to pay the minimum down on cards that you have a lower balance on and then pay as much as possible on the higher balance. The more you can pay over the minimum, the less you are going to have to pay in interest. When you have paid that card off, turn to the next card and pay that one off. You can close out the paid-off cards if you want, or you can keep a couple that have a low balance that you can pay off at once if you want. Having a credit card with a small balance is actually a good thing since it shows that you have a history of good payments behind you.
Getting good terms on your car loan starts early. It's always going to take work to make sure that your credit history is in good shape, but it will pay off in the long run.
