You should pay due importance to your FICO score while applying for a loan for motorcycle. The score goes a long way towards impacting the time-period of your bike loan. To all intent and purpose, the lender has to assess and evaluate the risk of your situation. He takes your FICO rating, as the necessary standard. The rate of interest that will be fixed up depends on your individual FICO score. In this context, it is interesting to note that the score that you have is changeable, and the exact credit score depends on the factors that ultimately influence your credit worthiness.
Keep a check on the following
The interest rates happen to be the primary yardstick of comparison, whereby you can compare one loan type with another. It is important to improve your credit worthiness, and only then you end up getting a rate of interest that you can well afford. With the following yardsticks, you can end up improving your credit worthiness:
• Make sure that your account balance is at least 30 percent below the existing credit limit. It is important to be particular about the current credit limit of the card that you own because lenders view card related debt as one of the risk-enhancing factors.
• It is something like this. If you have a limit of five thousand USD; then, the balance owed should be less than 1500USD.
• Be on time with your credit bills clearance, because timely clearance goes a long way towards improving your credit status. In turn, the prospect makes for a strong FICO rating.
• Moreover, when the loan providers find buyers who fail to meet the payment deadlines; then, they decline to sanction motorcycle loan. Even if they issue a loan package; they make it a point to increase the interest rate.
• Late payment and clearance are as injurious to the credit situation as delay in collection. Similarly, it applies to the cases of bankruptcies, and so you need to watch out for these factors before applying for vehicle loan.
Early establishment of credit
You should be fast in establishing your credit, and in this way you should provide your credit value. Make it a point to maintain at least a couple of credit cards. Even if you don’t have two, make sure to maintain, at least, one card of credit. The prospect of having one or more credit card goes a long way towards building credit. But then, you should be particular about the following things. It is evident that you will use the cards for making purchases but remember the importance of making small purchases. As said before, do not let the balance build up; instead make it a point to dispose of the balance, on a monthly basis. Make sure that the credit report that you are going to establish highlights every single account including the oldest one that you have.
Some more factors
At the end of the day what matters is proving you as an active user of credit cards and justifying the total time span of your individual credit history. In this context, it is important to remember:
• The total period of exposure goes to make a big difference. If you can justify your usage and application of credit cards over a long period of time, then you can easily get the approval for a loan for motorcycle.
• The Importance of avoiding excessive inquiries regarding the credit you are going to apply for. It is evident that you will undertake in-depth research but do refrain from asking too many questions to the money lenders.
• Too many inquiries can negatively impact your FICO score. Also, be watchful regarding the accessibility of your credit history. The more accessible you are the higher is the chances for credit inquiry.
• You already know that too many inquiries and investigations within a short period will affect your FICO standing.
In a nutshell
Be wise in choosing the most suitable loan package. Besides checking the interest rate, watch out for the loan security and the total fees that you incur. You already know the importance of checking your credit situation, and establishing your credit standing. The next line of action is to make an in-depth study of the loan inclusions so that you can find a package that suits your credit situation.