If you are in a position to buy a luxury vehicle like a Mercedes-Benz, you probably know a thing or two about financing and credit. It’s obvious that people with great credit get the best deals on financing. The deal is especially sweet today, as the global financial situation keeps interest rates low for all.
But if you have a not-so-good credit score, you’re definitely going to pay thousands of dollars more for a luxury car, a lot more than you would if your credit score was higher. The good news is, there are ways to move your credit score up, and they’re not that hard.
They do take a little time though, which leads us to:
Step 1: Slow Down
If you want to raise your credit score before buying a Mercedes-Benz, it’s not going to happen overnight. It’s not going to take all year either, in most cases. It all depends on what you have to do. Set aside at least a month or two before buying the car. You’ll be able to lock in some savings in that amount of time.
Step 2: Look At Your Credit Score and Credit History
You can look at your credit score for free once a year. Take a peek and also take a look at your credit histories. This will show you what is weighing your credit score down. It may be overdue payments. It may be that you’re using way too much credit. It may be that you’ve just requested a loan for a house. It may be that you opened 13 credit cards this year. Take note of the negative marks.
Step 3: Create a Plan of Attack
If you have multiple problems, attack them one at a time. If you have too many credit cards, cancel some of them (never the oldest account). If you use too much credit, pay some off and try to get each account so that you’re using less than 30% of the overall credit limit, per account. If you have been applying for loans and credit, stop. If you have little payments that you’ve forgotten about, pay them off or dispute them with the credit reporting agency. Sometimes those little things just disappear. If there’s a negative mark you can’t afford to fix, just leave it alone. It’ll still weigh down your score, but it won’t hurt you unless you poke the bear and remind the creditor that you’re still out there somewhere.
Step 4: Wait, Then Check Again
Wait for a month or so, then check your credit score again. There is no specific credit score needed to buy a car, but you won’t start saving money on interest until you’re in the mid 700’s or so. If you’re above 700 but not much higher, consider waiting awhile longer. However, if you are happy with the number you see, proceed to the next step.
Step 5: Buy the Car
If you’re buying a Mercedes-Benz, it pays to have a good credit score before financing. This will save you thousands over the lifespan of the loan. It takes time but it is worth it.