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How to get a Car Loan with 400 Credit Score in Hagersville

How to get a Car Loan with 400 Credit Score in Hagersville

If your credit score is 400 and you want to buy a car, there are some serious challenges you will need to overcome. Fortunately, our Hagersville car loans team are here to help you navigate the world of Canadian automobile financing.


Understanding the cause of your 400 credit score


The first thing we should take a look at is why your credit score is in the 400 range.


Do you have access to your credit reports? You can access them for free by signing up with TransUnion and Equifax.


There must be accounts in collections for your credit score to be in the 400s.


These negative items will stay in your credit report for up to seven years, so this is a problem that will not go away by itself.


You need to list all of the accounts that are in collections and pay them off in full, you could try to settle them for an amount less than what you owe, but as a rule, you should always pay your debts in full.


After these debts have been paid, your credit score will start to improve, but it will not happen overnight.


You will need to sign up for additional credit facilities like the Koho Credit Building facility, where you pay $7 per month for six months; if you make the payments on time, your credit score will begin to track higher.


Budgeting for success


Most of us have no formal training when it comes to finances; you need to prepare a budget that itemizes all of your current income sources and obligations.


After you have listed all of your existing obligations, you should set aside some cash for an emergency fund.


While more than 50% of Canadians are $200 away from insolvency, you do not want to be part of that statistic.


Try to set aside 3-6 months' outgoings so you don't have to worry if there is an unexpected work stoppage.


Where to find car loans with a 400-credit score


You have taken the necessary steps to repair your credit score, but it will take time before you see results.


In the interim, you will need to contact a local dealership that specializes in "second chance financing." When you have found those dealerships, contact them.


The dealership is going to take a deep dive and understand your financial situation and what caused you to get into financial hardship; perhaps it was due to the pandemic or a relationship breakdown.


Once you have met with the dealership, the in-house credit experts will show you the steps you need to take to boost your credit score even faster.


These dealerships already know all of the lenders in Canada, so they can find the ones that will approve your auto loan.


The interest rate for this type of financing is going to be high, but you can refinance it in a few months once your credit score has increased.


As you can see, there are ways to get a car loan in Canada with a 400 credit score; you just need to contact the dealerships to start the discussion.


We’d love to help you find a car loan with 400 credit score in Hagersville. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 


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