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Discovering A Better Motorcycle Loan With A Better Credit Score
By: Jay Fran
It is common knowledge that motorcycle financing companies’ base high importance
on your FICO credit scores when approving motorcycle loans. However, what many
people overlook is that their FICO credit score can dramatically impact the term
on their motorcycle loan along with the interest rate that is assigned to the
motorcycle loan.
In order to gain better motorcycle loan rates, it is highly important that you
think of your FICO credit score as a picture of how risky you are to the lender.
Your FICO credit score is essentially a benchmark which motorcycle financing
companies use to grade you and assign a risk to you when applying for a
motorcycle loan. Since factors about your credit change on a daily basis so can
your FICO credit score.
The below 5 tips are designed to help ensure you improve your creditworthiness
as your credit score changes. Ultimately these tips should help you obtain
better motorcycle loan rates and loan terms in the future.
Watch Your Debt– Keep your account balances below 25%-30% of your available
credit limit. This is especially true with your revolving credit card because
many motorcycle financing companies see credit card debt as more risky. If you
have a credit card with a $500 limit, you should try to keep the balance owed
below $150 when you apply for a motorcycle loan.
Check Your Credit Regularly – In today’s age it is easy to get online to check
your credit report. Checking your free credit report regularly is very important
because it can help you uncover inaccuracies that are affecting your FICO credit
score. Don’t let your credit health suffer due to inaccurate information or
errors on your credit report. If you find an inaccuracy on your credit report
contact the creditor associated with the account or the credit reporting
agencies to correct it immediately.
Avoid Excessive Credit Inquiries – A credit inquiry normally happens when you
apply for credit. If you have a large number of credit inquiries in a short time
period many motorcycle finance companies see this as a negative since it affects
your FICO credit score. Therefore, when you are applying for credit or shopping
for motorcycle loans it is very important you consider how many times your
credit is accessed. Be advised that sometimes motorcycle dealerships will
pre-screen you for a loan by asking you for your driver licenses and social
security number. Normally this results in a credit inquiry on your credit
report. Be prudent in shopping for credit and motorcycle financing.
Establish Credit Early – Time is very important part of improving your FICO
credit score. Therefore, it is recommended that you start building credit early
in life. Getting one or two credit cards can significantly help build your
credit. However, the key to this strategy is keeping your purchases small and
frequent and paying off the balance every month on time. When establishing
credit you should also keep the oldest account on your credit report open in
order to lengthen your period of active credit use. The length of your credit
history can make a big difference in getting approved for a motorcycle loan.
Make Your Payment On-time - Paying your current credit bills on-time is one of
the biggest factors that contributes to a higher FICO score. Typically when
motorcycle finance companies see potential customers that do not pay their bills
on-time then they either decline them or issue a motorcycle loan at a much
higher interest rate. Late payments, collections and bankruptcies have the
greatest negative effect on your credit score and how lenders rate you when
getting a motorcycle loan.
Copyright (c) 2005, by Jay Fran.
About the Author:
Jay Fran is a successful author at
http://www.motorcycle-financing-guide.com - A
comprehensive resource to compare online motorcycle financing, motorcycle loans
and online motorcycle buying tips for Polaris, Honda, Suzuki, Harley-Davidson,
Yamaha and more.
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