Getting a Car Loan with 400 Credit Score: How to Get Approved

Getting a Car Loan with 400 Credit Score: How to Get Approved

Posted on April 27, 2022

Canadians who need a Welland Auto Loan with 400 credit score must follow our suggestions if they want to get approved.

With such a low credit score, getting a Welland car loan on your own is slim to none if you do not follow these tips.

How long has your credit score been in the 400s?

Credit scores range from 350 up to 900 depending on whether you are using Equifax or TransUnion scoring models, having a 400 credit score means your credit has been bad for quite some time.

To get to the bottom of this, you will need to subscribe to free services like Credit Karma, which give you real-time access to your credit report.

When you have access to these free services, you should start looking for accounts that are in collections.

With a 400 credit score, you will have some accounts that are in collections or will be very soon.

Having these negative items will make prospective lenders not want to give you a loan, so you must do everything you can to bring those accounts back in good standing.

Negative items inside your credit report will stay there for seven years or even longer, so this is not something you can ignore.

In Canada, our credit score impacts our lives in a variety of different ways; with a credit score in the 400’s you will not be able to rent an apartment or even work in certain types of jobs where you are in a position of authority.

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.

The simplest way to improve your credit score

Once you have a grasp on what is weighing your credit score down, you can start taking some proactive steps to improve your credit.

How many trade-lines do you currently have? If you only have one account and it is in collections, you should consider signing up for a secured credit card.

This will give you more active trade-lines, which can create upward momentum on your credit score.

By opening up a secured credit card account, your credit score can improve while you work on bringing the other accounts up to date.

This process does take some time, but the benefits of having a good credit score are worth it!

How to get a Welland Auto Loan with 400 Credit Score

If you need to get a car soon and cannot wait for your credit score to improve, there are options available, but you will need expert help.

Contact dealerships in your area that offer bad credit car loans and begin exploring your options with them.

These dealerships know which lenders in Canada specialize in offering bad credit car loans and will identify those that have the most competitive terms.

The dealership will review your credit report and give you suggestions on how to improve your credit score quickly.

By using this approach, you can improve your credit score and still get a car today. Once your credit has improved, do everything you can to never let it go back down to the 400s.

We’d love to help you find a Welland auto loan with 400 credit score. 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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