Bad credit car loans are designed to help people of all kinds get the car they want with the credit they need. It doesn’t matter why you need a subprime auto loan, just that you can afford one. The rest is mere details.
There are three major factors that can affect your credit score. As well as influencing how easy or difficult it is to secure credit, your credit score will also influence how much interest you pay on any bad credit auto loan you take out. This is because those with less than ideal scores are regarded as more of a risk, even if you’re not.
The three factors are:
Late or missed payments
Even if a payment was late or missed entirely through no fault of your own, it will hit that credit score. A track record of paying debts on time is the first thing any lender will look at when considering subprime auto loans or any lending. After all, they are going to want their money back on time!
Past bankruptcy or debt agreements
Previous bankruptcy or voluntary debt management agreements used to be quite rare. Given how the financial landscape has changed over the past eight years or so, they are no longer quite so rare. Any bankruptcy or voluntary debt management agreement undertaken in recent history will also affect your credit score.
High income to debt ratio
Another significant indicator of financial health is the ratio between the money coming in to the money owed. The bigger the difference between the two, the higher the score. The fewer debts owed, the higher the score as well as the higher the income, the higher the score.
While a lower than average credit score can limit options when looking to borrow, there are still plenty of reputable lenders out there who are happy to work with you. Many appreciate that we often find ourselves in difficulty through no fault of our own, or that some are still trying to rebuild lives after a life changing moment.
Car Nation Canada works with Dixie Auto Loans, an established, trustworthy bad credit auto loan specialist. They treat customers fairly and will approve an auto loan wherever possible. So if you’re in need of a new car, there’s even more reason to visit us.