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What Canadians need to know about buying a car with lousy credit

What Canadians need to know about buying a car with lousy credit

Our credit score has a material impact on the quality of our life. If you have a lousy credit score, it can prevent you from renting an apartment, getting certain jobs and whenever you do get approved for financing, it will be very expensive.

Today our Hannon car loans team are going to take a look at how to buy a car in Canada with lousy credit.

If you are serious about turning your finances around, then these suggestions are going to help.

Credit score fundamentals

Each credit reporting agency will have utilized their own unique credit scoring model, the two biggest credit reporting agencies in Canada are TransUnion and Equifax.

The first and biggest factor that goes into calculating a credit score is whether you have always paid your accounts on time. Even one missed payment and your credit score is going to take a dive, so never miss a payment.

While paying your bills on time is a big factor, the length of time these accounts have been open is another factor. If your accounts are relatively new, they will not score as high when compared to accounts that have been open for several years.

The types of credit that you have also influence your score. You should have a mix of revolving credit like credit cards and installment loans like car and furniture payments.

Credit score needed for a car loan in Hannon

In order to get a car loan, your credit score has to be over 600. There may be some lenders that will approve a loan if your score is under 600 but the interest rates are going to be very high.

Having a reliable source of income

If you have a great credit score but income that is not stable, you will still have a tough time getting a car loan in Hannon.

On the flipside, if you have lousy credit but a substantial amount of stable income then you will be able to get a car loan.

Prospective lenders are more likely to approve a Hannon car loan if you have a substantial income and are willing to work on fixing your credit. The caveat being that this income can be verified with documentation, be ready to show your bank account statements and income tax assessments.

Finding lenders that will approve your car loan in Hannon

There are lenders that specialize in subprime car loans but you cannot find them by searching online. These lenders are only accessible through car dealerships that have working relationships with the lender.

Your best and frankly speaking only option of getting a car loan approved with lousy credit is by going to your local dealership. The dealership will be able to get you approved for a car loan even if you were declined by others.

Along with being able to get you approved for a car loan, the dealerships has credit experts that can help you repair your credit issues and help you get back on your feet financially speaking.

There is a shortage of cars in Canada and around the world, if you need a car or will in the next couple of years, then you need to contact your local dealership and book an appointment.

We will use all our skill and experience to deliver the lowest possible Hannon auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

Categories: Auto Loan

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