It is widely accepted that motorcycle lenders place a high value on your FICO credit scores when authorizing motorcycle loan payments.
What many people fail to realize is that their FICO credit score has a massive effect on the term of their motorcycle loan as well as the rate of interest that is given to the motorcycle loan.
To obtain better motorcycle loan interest rates, consider your FICO credit score as a representation of how costly you are to the loan company. Once you apply for a motorcycle loan, lenders will use your Credit score to evaluate you and assign a potential loss to you. Because credit-related factors can change on a daily basis, so can your credit score.
The five steps listed below are meant to ensure that you raise your creditworthiness as your credit score changes. These steps should ultimately enable you to get future motorcycle loans at better rates.
1- Keep an eye on your debt:
Try to keep your account balances at no more than 30% of your credit limit.
Credit card debt is particularly problematic because many motorcycle lenders consider it to be riskier than other types of debt. When applying for a motorcycle loan, try to keep your credit card balance below $1500 if your card has a $5,000 credit limit.
2- Make Your Payment On-time:
One of the key elements that raises your FICO score is paying your current credit card bills on time.
Motorcycle lenders typically turn away prospective borrowers who do not make on-time payments on their bills or offer loans with significantly higher interest rates. The three things that have the biggest negative impact on your credit score and how lenders view you when applying for a motorcycle loan are late payments, collections, and bankruptcy.
3- Establish Credit Early:
Early credit establishment is crucial for raising your FICO score. As a result, it is advised that you start building credit as soon as possible. Obtaining one or two credit cards can make a big difference in credit development. The secret to this tactic is to make small, frequent purchases and to promptly pay off the outstanding balance each month.
In order to extend your period of active credit use when establishing credit, you should also keep the oldest account on your credit report open. When applying for a motorcycle loan, the length of your credit history can have a significant impact on your approval.
4- Avoid Excessive Credit Inquiries:
When you apply for credit, a credit inquiry typically occurs.
Many motorcycles lender’s view having a lot of credit inquiries in a short period of time as a bad thing because it lowers your FICO score. Therefore, be mindful of how frequently your credit is accessed when you apply for credit or shop for motorcycle loans.
You should be aware that motorcycle dealerships may occasionally pre-screen you by requesting your driver’s license and social security number. This typically leads to a credit inquiry being made on your credit report.
Be careful when comparing motorcycle loans and credit offers.
5- Check Your Credit Regularly:
Today, it is simple to access the internet and check your credit. Regularly reviewing your free credit report is crucial because it can help you find errors that are negatively affecting your FICO credit score.
Don’t let false information cause your credit health to deteriorate. If you discover an error on your credit report, get in touch with the creditor handling the account or the credit reporting companies right away to have it fixed.
