We talk about bad credit car loans a lot here on our blog. The typical scenario is someone who has had trouble paying debts or got in over their head. But there is another type of person we deal with that has what we refer to as ‘situational bad credit’, which involves sudden bad credit, which is most of the time out of control.
So, what is it and what can you do about it? Our Kitchener auto loan team explains.
Situational bad credit
Situational bad credit is different to ‘standard’ bad credit in that it’s a blip in an otherwise exemplary credit history. It happens a lot after serious illness, after divorce, after being made redundant or another life-altering situation.
You may have a spotless payment history and a high credit score. Then, the situation hit, everything went crazy and you were unable to manage everything at once.
That is situational bad credit.
It’s very easy to identify situational bad credit over ‘standard’ bad credit as you will have a very positive payment history with a short period of missed payments or lender actions.
We would normally see a pattern of missed payments over time and perhaps consumer proposals or other debt management steps with other bad credit car loans.
With situational bad credit, we don’t see any of that. Just a positive payment history and then something else entirely.
What can you do about sudden bad credit?
You can deal with it. Life happens. People get into situations through no fault of their own. It happens. What you will be judged on is what you do next.
If you take control, contact lenders and work something out to repay what you owe, you will be judged fairly and positively. Paying on time will help rebuild your payment history and your credit score, which will be to your benefit.
If you bury your head in the sand and try to ignore the situation, you won’t be viewed quite as positively. The debt will still be there and will still accrue interest, which is to your detriment.
One approach will definitely not prevent you from getting a bad credit car loan while the other may make life harder.
Can you get a Kitchener car loan with sudden bad credit?
Yes, you can get a Kitchener car loan with situational bad credit!
The process is exactly the same as applying for any bad credit car loan. For the most part, it is often easier as you had a positive record before the situation happened.
As long as you can demonstrate to the lender that the situation has passed, that you have everything under control and that you can afford the loan, you should have no trouble qualifying for one.
Bad credit, situational or otherwise, doesn’t have the stigma it once did. While you may not like the idea of having it, nobody is going to judge you for it.
We are all here to help you get the car loan you need and can afford so you can buy the car you want. That’s all we’re interested in!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!