Tough Times? On the Spot Financing Can Help

If you're going through a rough financial time in your life, you're not alone. If your financial problems have led to, or have contributed to a poor credit score, you're not alone either. On the spot financing, also known as buy here, pay here, might be able to help you get back on your feet.

The way the credit system is set up can sometimes be contradictory. If your credit score is low, the only way to build it back up is through credit cards or obtaining bank loans, then paying them off. But these same financial institutions will turn you down if you already have bad credit. Once you've been turned down, you may feel stuck, and you might not have much hope for improving your credit score. So how is it that on the spot financing can help you in this kind of predicament?

First of all, what is on the spot financing? On the spot financing is a type car dealership that supplies the vehicle AND the vehicle financing to people who have poor credit, or no credit at all. If you are trying to buy a car but cannot because banks turn you down for car loans due to your poor credit, then you may be interested in going to an on the spot financing dealership. Often times, going through this kind of dealership can be beneficial to people in multiple ways.

On the spot financing dealerships can finance a vehicle for you, when no one else is willing to. Some dealerships may even look at your finances to help you determine what plan is right for you. Secondly, you may get the opportunity to really improve your credit through certain on the spot financing dealerships. If you make your payments on time, pay off your vehicle early, or demonstrate any other kind of financial responsibility, dealerships may report you to credit bureaus. Once credit bureaus see this, your credit will improve. However, beware, many on the spot financing dealerships that claim to report to credit bureaus will actually only report you when you've missed a payment, thus damaging your credit and never giving you the chance to improve it. But a few of the good ones are on your side. They'll report your responsible behavior, giving you the opportunity to improve your credit. So make sure to do your research so you can work with the credible on the spot financing dealerships.

Bad credit can cause many people to feel stuck. On the spot financing is a great way to get back on your feet, as long as you work with a credible dealership.

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Repair Credit Scores Before Seeking Financing

Many consumers will know long before they make a big financial move that they intend to do so. Rarely do consumers who work for a living make an impulse buy as large as a vehicle or home. Such large investments do require some forethought and financial planning. Part of that planning should be to investigate one's existing credit score and work on improving one's credit rating well before financing ventures are sought out.

The Problem With Waiting

Consumers who are about to embark on a big-ticket purchase such as the dream home they finally found will suddenly come to realize the importance of their credit even if they paid it no attention in the past. When a consumer finds the house they now can not live without, they will need to apply for a mortgage with a lender. The lender will make their decision based largely on a consumer's credit score. If that score is low and the credit history is marred by financial issues, there is a strong likelihood the loan application will be denied right away.

The problem with waiting is that while credit improvement is always possible, it takes time to make a credit score get better. Consumers will have to put forth the effort to make their credit better. Bills will need to be paid on time and open accounts analyzed in order for credit scores to rise. Unpaid creditor balances should be eliminated as efficiently as possible.

Looking at the Timeline

These actions are the only way to improve existing credit scores. They do work but it will not be an overnight activity. Once a consumer orders their credit reports, it takes up to 45 days for the credit reporting bureaus to investigate and correct inaccurate information that a consumer disputes with the bureaus. Creditors will take even longer to update score-relevant credit information. It can take several months for consumers to notice a difference after paying debts on time and avoiding new lines of credit.

For those with plans of financing something in the future, there should be a credit repair lead time of at least 6 months, if not a year, if the consumer wants to make a marked difference. With this amount of time, consumers will have the ability to review the details of the credit and make the necessary effort to repair past financial mistakes.

Credit Matters Elsewhere

Credit scores matter for much more than just mortgage loans and vehicle financing. These days industries of all kinds are relying on a consumer credit score to make important decisions that affect a consumer's life. For instance, basic services like electricity may require a credit check when new customers apply for service. Without a good credit record, customers will likely have to pay a hefty down payment in order to get services activated.

For consumers looking for a new job, especially in the areas of finance or for government employment, a credit score can make or break your chances of being hired. Low credit scores can indicate that the applicant has difficulty managing their own financial matters and may not have the characteristics to be successful at a specific job. If a consumer is looking for a new place to live, it is important to know that many landlords will also require a credit check before agreeing to rent.

Those who drive and must have car insurance coverage to stay within the laws will find they must spend more for insurance premiums than another person with similar insurance needs. Insurance companies use credit scores to predict reckless behavior. Studies show a correlation between low credit scores and the increased likelihood that policyholders will file one or more claims.

Get Your Act Together

Because credit matters in more places than loan offices these days, it is important to keep credit scores high and histories maintained. Ideally, all consumers should request their free annual copy of their credit report from each of the consumer credit reporting bureaus. Credit scores are not part of the free report but can be purchased for a small fee from the credit reporting agencies.

Once the reports come in, consumers should analyze every bit of information the reports contain and dispute all inaccurate/unknown information with the credit bureaus. Investigations will be launched into your dispute and incorrect information will be removed from a credit report. This step alone has improved many consumer credit scores significantly. More than 80% of credit reports are found to contain at least one mistake.

After reviewing and disputing information, consumers need to maintain their active accounts with on-time payments every month. Debts should be eliminated as quickly as possible to improve credit to income ratios. After several months of good payment activity and no new applications for credit, consumers can re-order their credit information for the updated scores before proceeding ahead with request for financing.

This guest post was written by Steve Dowell, a professional writer specializing in topics related to personal finance, debt relief, credit repair and more. Pass through creditrepair.org for more tips and advice.

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