Consumer Car Buying Advice Blog

Reestablishing car credit for most buyers means getting approved for at least one bad credit auto loan

Helping your credit repair

If you’re reading this there’s a good chance you’ve already been turned down for a conventional auto loan and you may be wondering what your options are right now.

During the past twenty years, we’ve heard this from many people here at Auto Credit Express, where our commitment to bad credit consumers extends to our web site. It features a bad credit auto loan application – something we felt was needed after seeing the feelings of frustration and shame that customers with poor credit often experience when a dealer doesn’t offer bad credit car loans.

And while these folks can always try a tote the note dealer, this won’t solve their car credit issues since these dealers usually don’t report loans or loan payments to the credit bureaus and the loans, themselves, often end up in repossession.

So if you have bad credit, what can you do?

Credit cards and bad credit auto loans

At this point, many consumers decide to pay cash for a cheap car and get a secured credit card to rebuild their car credit. This might seem logical, but there is at least one reason why it probably won’t work – even though a secured credit card might raise their credit scores.

This is because a secured credit card restores revolving credit. Revolving credit usually involves a comparatively smaller loan balance. If only the minimum payment is made, the credit card company will allow you to carry over (revolve) the remaining balance to the next month.

A car loan is a type of installment credit. Using this credit, you agree to pay back the amount borrowed, plus interest, for a set amount per month over a fixed term. The amount borrowed is usually much higher than revolving credit limits and it requires a higher percentage of the loan balance as a monthly payment. Installment credit contracts are also much less flexible to changes in loan terms. The buyer, therefore, has to be more responsible in paying back the loan.

Credit repair

Credit bureaus take both types of credit into consideration in determining your credit score. Car lenders, however, put a special emphasis on your installment car loan history. In other words, a good payment history with a credit card will help your credit score but it’s not the strongest type of credit to bring to the table if you’re applying for a car loan.

For this reason, even applicants with decent credit scores can still be turned down for a car loan from a regular lender – especially if they’ve never had one before or if it turns out that a prior car loan had a spotty payment history. In either case, an applicant might have to first prove themselves by taking out a car loan with a bad credit lender that caters to a riskier type of customer.

We can help

At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help them. These dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance at getting approved for car loans with bad credit.

So if you are serious about getting your car credit back on track, you can begin now by filling out our bad credit car loan application.

Tags: Bad Credit, bad credit auto loan, Credit Repair, secured credit card

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