It is quite common to see people shrug at the mention of the concept of “car financing” especially in Nigeria where most credit opportunities are seen as ‘scams’. In our recent blog post: How Car Financing Works in Nigeria 2022, we presented the pros and cons of car financing in Nigeria.
If you have read it, you will discover that the underlying strength of any credit system, be it car financing or any other, is trust. For anyone to be able to get car financing from any organisation, there has to be a sense of trust. In this case, the metric of trust is your credit score. This brings us to the topic of how car financing can boost your credit score.
A credit score is usually a personalised three-digit number that lenders use to help them decide whether you get a credit or loan, and the interest rate you are to be charged for it. The five key elements that determine your credit score are payment history (35 per cent), amounts owed (30 per cent), length of credit history (15 per cent), new credit (10 per cent) and the type of credit used (10 per cent). The credit score usually ranges from 300-850.
Below are credit worthiness scales;
So, the higher your credit score, the higher your chances of getting a loan or credit in no time. Your car financing has a way of boosting your credit score. Want to know how?
With the JAC Car financing, you are allowed to pay back your car loan in flexible instalment payments and in doing so, you show credibility to your creditors which in turn boosts your credit score. Consistent and prompt payment of your car loans shows your credibility to your car dealership. Skipping instalment payments will not only slow down the process of your full ownership but also drag your credit score; thereby, reducing your chances of getting other credit opportunities in the future.
Quick Approval through Car Financing
Because you do not need collateral to get car financing, as the car indirectly stands as collateral, the process of getting approval for car finance doesn’t take a lot of time compared to other credits. For instance, all you need to get a JAC Car Financing is a 20% deposit and credible documents. Once you get your car finance approved and pay back your instalments promptly, your credit score increases; giving you better chances of getting bigger credits for business or another car finance.
Credit builds credit
The essence of building your credit score with a car loan is to show your trustworthiness. So, if you will be using a car loan to build your credit score, you must know that the loan itself will not help build your credit report or score. However, if you establish a solid payment history by keeping up with your monthly payments, your car financing will help to improve your credit score in the long run.
You might be wondering why a good credit score is worth it. Well, poor credit can cost you the following:
What are you waiting for?
JAC Motors Nigeria and Elizade Autoland are interested in building with you. Little drops of water they say make an ocean. With this philosophy in view, JAC Nigeria and Elizade Autoland in partnership with Meristem, Union Bank, Sterling Bank, Stanbic IBTC, First Bank and Bancorp Finance, are offering an opportunity to salary earners and business owners to own a brand new JAC car and pay in instalments for up to four years.
