Consumers with credit problems often wonder how they got there but in most cases it probably has to do with one of these three issues
What we know
Here at Auto Credit Express we’ve spent more than two decades helping car buyers with credit problems find those new car dealers that work with a broad range of high risk lenders that can give them their best opportunity for approved car loans.
During that time we’ve also noted a pattern among applicants – other than life altering events such as catastrophic medical problems – that typically leads to bad credit.
With that being said, we’d like to share the top three reasons many of these people with credit issues find themselves in this situation:
Paying bills late
Late payments will negatively impact everyone’s FICO scores in a big way. Even if you find yourself unable to pay all your bills on time, prioritizing them and working from the top down can keep this situation from spiraling out of control.
Maintaining high credit card balances
Lenders don’t like to see credit card balances maxed out. In fact, it’s a good idea to use just 30% or less of any credit lines. If customers are using more than that and especially if the running balance remains high, lenders see this as a red flag that cardholders are carrying too much debt.
Applying for a lot of credit at the same time
If you apply multiple times for the same type of loan (such as a car loan or home equity loan) within a short time frame, the credit bureaus typically look upon this as one instance. But applying for different types of credit at the same time, such as multiple credit cards from different sources, could lower your credit scores.
What to do with poor credit
If you currently have less than perfect credit and you need a car, we want you to know that, in most cases, there is another option you should consider other than a BHPH or tote the note dealer.
We say this because taking out one of these loans won’t help your credit scores since most of these dealers don’t report these auto loans or any loan payments to the credit bureaus. The result of this is that the next time they need transportation, most of these customers will find themselves with the same lack of car credit they currently are experiencing.
The Bottom Line
Hindsight is always twenty-twenty. But avoiding the three problems listed above, especially after recovering from a credit mistake, will go a long way towards credit repair and improving your credit scores.
One more thing to remember: if you find yourself with damaged car credit, instead of financing your next vehicle from a no credit check car dealer, consider applying for a car loan with us. Auto Credit Express specializes in matching consumers with challenging credit situations with franchised new car dealers that can offer them their best chance for car loan approvals.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online car loans application.