While in some instances car buyers who get turned down for a conventional auto loan are unable to pinpoint the problem credit that led to this it usually involves one of three issues
Here at Auto Credit Express we've spent over twenty years helping car buyers with poor credit that are looking for online auto loans find those new car dealers that, working with a range of high-risk lenders, can give them their best opportunities for auto loan approvals.
By the time these applicants get to us, the first question most of them ask is "Can I buy a car with bad credit?" The answer, provided they meet income, debt and down payment requirements, is usually "yes."
At the same time, some consumers also want to know why they were turned down in the first place. The fact is, over the past two decades we've noticed a pattern among credit-challenged applicants – other than life altering events such as a job loss or catastrophic medical problems – that typically leads to credit difficulties. So at this point we'd like to share the top three reasons people with credit issues find themselves in this situation.
Paying bills late
Late payments will negatively impact credit 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 cards maxed out. In fact, it's a good idea to use just 30% or less of any credit lines. If card holders are using more than that and especially if the running balance remains high, lenders see this as a red flag that they are carrying too much debt.
Applying for a lot of credit at the same time
Applying multiple times for the same type of credit (such as a car loan) within a short time frame and the credit bureaus will typically treat this as one instance. But applying for different types of credit at the same time, such as multiple credit cards from different sources, a home equity line of credit and an auto loan could lower your FICO scores.
Where to apply for a car loan
For buyers with damaged credit that need a car, there is an option that should be exercised before visiting a BHPH car dealer.
We say this because taking out one of these types of loans won't help your credit scores since these dealers typically don't report loans or loan payments to the credit bureaus. The result is that the next time these consumers need transportation, most will be dealing with the same lack of car credit they're currently experiencing.
As we see it
Hindsight is always 20-20. But for most people, avoiding the three problems listed above, especially after recovering from a credit mistake, will go a long way towards maintaining and improving their FICO scores.
One more thing to remember: Auto Credit Express matches people that have experienced difficulties with their car credit to those new car dealers that can offer them their best chances for approved auto loans.
So if you find yourself in this situation and you're ready to reestablish your auto credit, you can begin now by filling out our online auto loan application.