Latest Equifax report shows auto loans have reached pre recession levels which is positive news for anyone applying for a problem credit auto loan
More good news
For people applying for horrible credit auto loans, Equifax released a report today that you should know about.
We should know because for close to two decades we've been involved in bad credit car sales here at Auto Credit Express.
A web site we developed especially for credit-challenged people explains the approved auto loans process and the issues that often lead to repossession while showing them that, unlike a tote the note dealer, these loans can result in better credit scores.
But before applying for bad credit car loans it also helps to know what's going on with auto finance and this week Equifax had more good news.
According to their October 2011 National Credit Trend Report, June car loans, although slightly less than the March total of 1.8 million still represented nearly an 11 percent increase over June of 2010 and even higher than the August 2009 total that was boosted by the “Cash for Clunkers” programs.
"Auto lending continues to be one of the most promising lending sectors today based on the data," said Michael Koukounas, Senior Vice President of Special Client Services for Equifax. "If this momentum can be maintained through the remainder of the year, 2011 year-end totals should reflect a comparable return to normalcy to pre-recession lending levels."
Bad credit car loans
There is, however, one area of concern in that the report points out a “Notable discrepancy in percentages of subprime loans originated by banks/credit unions/savings and loans versus auto finance companies.” It states that “less than 10 percent of bank/credit union/savings and loan-originated loans to borrowers with Equifax Credit Scores below 600.” And adds that “25 percent of auto finance company-originated loans to borrowers with Equifax Credit Scores below 600.”
With this in mind, here are some tips we suggest bad credit buyers should follow:
• Study your credit report, know the information it contains and be prepared to explain any negative entries.
• Know your FICO scores.
• Once approved, choose an affordable car with a monthly payment no more than 10% to 15% of your gross monthly income (the lower the better).
• Come prepared with a down payment in either cash or real trade equity (the higher the down payment the better your chances). Not including rebates or dealer cash, 15% or more will increase your chances of an approval for a bad credit car.
As we see it
Loan applicants with bad credit should be aware of what is going on with auto lending. Even after being turned down for a conventional car loan it doesn't mean the only alternative is a tote the note dealer.
At Auto Credit Express, we specialize in placing poor credit customers with dealers that can help them get approved auto loans.
So if you're serious about getting your car credit back on track you can begin now by filling out our online car loans bad credit application.