We know how hard it is when you are dealing with past due collections or current unresolved debts. When the time comes to make a purchase of an automobile, approval through a traditional dealership financing program can be difficult or impossible because of the negative marks on your credit report.
But if you have paid your debts off, there is good news. You can still get approved and, depending on your situation, you might be able to get financed as you would have if you were working with a traditional lender. Bad credit takes many forms, and some are more negative than others. Auto financing is out there for all credit types, and our team is here to give you more information to aid in your research.
Types of Bad Credit
First of all, there are two kinds of bad credit: situational and habitual. And the biggest issue for car buyers is finding a dealer that will distinguish between the two.
Situational (A.K.A. "Good-Bad Credit")
When you have situational credit issues, they typically stem from a life event that resulted in a change in your economic circumstances. These can be a range of things:
- Loss of employment
- Sudden illness or injury
- Bankruptcy due to business failure
And sometimes, it's a mixture of these situations. So, what you need to do is find a lender who will take into account how responsibly you handled your finances prior to the event and how you have conducted yourself since. If you have made an effort to partially pay off or have paid off past accounts in full, an auto loan approval could go as smoothly as it would if you had good credit. If you wish, you might even be able to get a new car with little to no money down.
Habitual (A.K.A. "Bad-Bad Credit")
If you have had a history of credit abuse or have a habit of not paying your bills on time, you will fall into the category of having an habitual bad credit history. Behaviors usually include:
- Delinquent accounts, ranging from credit cards, bills and court ordered decrees such as child support.
- Multiple bankruptcies
- Repossessions not associated with a bankruptcy
- Writing bad checks
If you have done these things, this doesn't automatically mean that you can't get a loan. But, you will have a more limited selection of what you can buy, and it will likely be a selection of used vehicles. In addition to that, you may need a minimum of $500 to a $1,000 for a down payment, or a vehicle (with equity) to trade in.
Getting Back on Track
Just because you have had issues in the past with your credit doesn't mean you can't turn your situation around. Get back on the right path with a bad credit auto loan. Auto Credit Express can help you make this happen. Once you complete the quick and simple online application, we will find the dealer who can help you. What are you waiting for? Do it today.