Sadly most traditional car lenders don’t approve people for auto loans with credit scores lower than 619. That is because they see bad credit as risky borrowers. For those who have been turned down previously the only resort is tracking down some form of “second-chance” or “last resort” automotive financing. One location where this often offered is at Buy Here Pay Here car lots. These places cater to bad credit consumers, and often don’t even perform credit checks. To them, “your job is your credit.” This means they are more concerned with income than credit history. If you earn enough to make your payments, then you have a good chance of being approved. They offer a wide range of vehicles to ensure that even people with low income will qualify for some kind of transportation.
Getting Approved with Bad Credit
Despite the fact that these dealerships can often approve credit scores of 550 and lower, there are things you can do to increase the odds you get approved. These include offering a sizeable down payment, getting a cosigner, and putting down the most accurate information possible on your application for financing.
The Drawbacks of BHPH Car Loans
Before you get too excited, however, there are some definite disadvantages to Buy Here Pay Here car loans. These include high rate APR financing (understandable given the credit risk of the average BHPH customer), a limited (and typically well-used) range of cars and trucks, and weekly (rather than monthly) payments. Many lots also have measures in place to enable them to more easily repossess a vehicle in the case that a customer misses payments and falls into delinquency. These may even include remote engine shutdown devices.
The Benefits of Online Pre-Approval
When it comes to getting pre-qualified for financing, the internet can be a poweful resource. Often, submitting a credit application online has benefits such as:
Time: online pre-approval takes only a few minutes
Money: you can focus solely price without worrying that the salesperson is going to just roll any savings you gain right into your auto loan
Anxieties: no one wants to be turned down for financing
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