Monitoring Your Score
If you want to get motivated by seeing your hard work pay off, you’ll have to sign up for a service that allows you to monitor your credit score. First, you can view your entire credit history by ordering a copy through AnnualCreditReport.com. This is the government-sponsored site that doesn’t require you to sign up for credit monitoring services. However, it will only show you your report, not your score. When using this site, you would have to pay to see the actual score.
We offer a free credit check where you can get your credit score as part of our helpful resources. There are also other credit card companies that also offer you the option to view your credit score for free. You can also get a good estimate at CreditKarma.com and by using the budgeting site Mint.com. While some sites aren’t usually giving you an actual FICO score, and your “real” score may be a bit higher or lower than the scores they’re showing you, it’s an excellent opportunity to look at the general trend of your credit score. With consistent good behavior, you should see it going up.
If you are interested in viewing the real score from one of the major credit bureaus, order them individually through the AnnualCreditReport.com site. Many other “free” sites require you to sign up for a “monthly trial” of a credit monitoring service. Doing this can be risky because if you forget to cancel it, you’ll get charge around $50 per month for a service you probably don’t need.
Refinancing Auto Loans for Poor Credit
Even with poor credit, you have options. After a year or two of paying your bills on time and being responsible with your credit cards, you should see a significant difference in your credit score. This difference is likely to be enough to get you a better rate on your current poor credit car loans. At this point, it is smart to look into your options for refinancing.
Refinancing your auto loan is a bit like the initial application for an auto loan, except that you do not have the pressure of trying to find the right car along while attempting to find the right loan. You’ll have to ask your current lender to tell you the balance, and this will be the amount that you are financing. You’ll also have to provide the companies with proof of your income and any other types of financial information you had to provide when you first applied.
It is a good idea to start your search with your current lender, Assuming you’ve been good about paying them back. Valley Auto Loans also can find you a refinance lender who will restructure your loan. This option puts your application up in front of several lenders for review without running your credit report several times. Then you can choose the loan you like without any obligation to the loans that you are offered. The good news is that even the poor credit car owners can qualify for a car refinance loan.
Don’t be fooled by lower payments or cash back offers
Don’t be fooled by companies trying to lower your monthly payment by lengthening the term of the loan. If you’ve already paid off two years of a loan that was originally a four-year loan, you ideally want to refinance the loan for a new two-year period. Some companies may offer you options for two, three and four-year loans, but if you do this, you’ll be paying more in the long run. Many companies will offer you cash back to refinance. Don’t be fooled by the “cash back” incentive. If you do not have much equity built up, the money they offer is added to the new loan, and you will probably owe more than the car is worth. You will be upside-down on that loan.
After you rebuild some credit and refinance your poor credit loan to get a lower payment, don’t jeopardize your better credit and lower payment by borrowing cash back on the new loan. If you have moved away from poor credit auto loans or bankruptcy, but you are not in the clear yet. Building and maintaining good credit is something that you should be doing throughout your life. You’ll never have to worry about not qualifying for exceptional rates again, but there’s often ways to improve and get even better rates. Poor credit auto loans are a good place to start rebuilding your credit today.