It can feel intimidating to try and finance a car loan with 500 credit score or less. But with a few of our easy to follow tips, you’ll get a car you want in no time.
The majority of people in Canada rely on credit to lead a normal life; with the average Canadian just $200 away from insolvency, your credit score can make or break you financially.
Buying a car with 500 credit score could lead to some significant challenges, especially if left unchecked. Your credit score is not set in stone, it changes monthly, but you will need to address the causes of your low credit score.
Credit Score Monitoring
One of the primary reasons that a person has a weak credit score is due to negative elements inside the credit report.
The negative item may be in one report but not the other, so you need to pay attention to both agencies.
Suppose you do notice anything that is not accurate. In that case, you should reach out to the credit reporting agency and submit a dispute.
It can take 30-60 days for the dispute to work its way through, but the law requires all credit reporting agencies to remove any inaccurate information.
A common reason why credit scores fall in the 500 range is due to missing payments, it is not just one payment, but multiple missed payments.
If the payments are not brought up to date, your credit score will remain in the mid-500’s for quite some time to come.
Issues on your credit report will stay there for six years, so if you are waiting for the problems to go away on their own, they won’t!
Going forward, you should make a firm commitment always to pay your debts on time and reduce the total amount of debt you are carrying; this will take time, but you are putting yourself on the path towards success.
How To finance a Car Loan With 500 Credit Score
You are working on rebuilding your credit which is great, but you need a car now, so what do you do?
Your best option is to reach out to dealerships in your community that specialize in bad credit car financing.
These dealerships will advertise if they specialize in second chance financing; when you have identified which of those dealerships you should head over and meet up with them.
The dealership is going to get to know you as a person and understand the root cause of your credit challenges.
While speaking with the dealership, they will show you the best way to improve your credit score and also find lenders that will approve your car loan.
Unfortunately, due to your low credit score, you will not be able to secure a loan for a brand-new car, but you can get a used car.
After the dealership has found the lender/s that will give you a loan, they will begin showing you vehicles in their inventory that fall within your budget.
Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you buy a car with 550 credit score or less and will work with you no matter your credit score.