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.
