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.