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Getting a Car Loan with 500 Credit Score: How to Get Approved

Getting a Car Loan with 500 Credit Score: How to Get Approved

Are you having a hard time getting a Halton car loan with 500 credit score? If your credit score is in the 500s, finding a lender that is willing to give you a chance may seem impossible, but there are options available.

 

If you stick around, we will show you how to fix your credit, so you never have to deal with rejection again and still get a car today.

 

Understanding why your credit score is in the 500s

 

The first thing we need to address is why your credit score is in the 500s; prospective lenders will want to know why your credit score is low, so you need to have a prepared response.

 

Start by signing up with the free credit monitoring services being offered by TransUnion and Equifax.

 

Once you have access to your credit reports, there is a section of your report where you can see your repayment history. Note which accounts are past due; with a credit score in the 500s, you could have more than one account past due.

 

Now that you know which accounts are weighing down your credit score, you need to work on bringing them current.

 

One method is by making all of your minimum payments and then using a debt snowball repayment approach.

 

The snowball is where you allocate every extra dollar in your budget to paying down your smallest debt; once you knock that one out, you proceed to the next bill until all of your debts are paid.

 

This may seem like hard work, it will take some discipline, but your credit score will rise once your debts are under control.

 

Reviewing your car-buying budget

 

Since you already made a budget for your debt snowball repayment plan, the next item is calculating your car-buying budget.

 

The median car payment in Canada is around $500 per month, so you should use that as your starting point. Along with the car payment, you need to include gas, maintenance, insurance, and parking.

 

All of these additional costs will need to be factored into your budget. A safe ballpark figure is around $1,000 per month.

 

Where to find Halton car loans with a credit score in the 500s

 

You have followed our advice on how to fix your credit score, but you still need to buy a car today.

 

The truth is you cannot find a suitable lender on your own; your only viable option is to work with local car dealerships that have a track record of helping individuals just like you get approved for a car loan.

 

The dealership's in-house credit professional will spend some time looking over your finances so they can understand why you were having credit issues; perhaps you lost your job during the pandemic.

 

Once the dealership has a clear understanding, they will negotiate the most competitive terms on your behalf. The dealership will get you approved for a car loan, but you may only qualify for a used car, depending on your income.

 

If you stick with the advice provided by the dealership's in-house credit expert, your credit score will improve, and you will never have to deal with a bad credit car loan again, but you need to contact the dealership today.

 

We’d love to help you find a Halton car loan with 500 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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    Categories: Auto Loan

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