Bad Credit Car Loan Tips

Most people go through rough financial times. If you have gone through one and have recovered or are in the process of recovery, one of the things you may be looking at is buying a new car. You know that your financial position is such that you can now afford it. But your credit history may still be working against you. The finance company has no choice but to look at your car loan application based on your credit rating and history. But this does not mean that you cannot buy the new car you want. Here are a few tips on getting bad credit car loans in Ottawa.

Start off by knowing what your credit rating is. You are entitled to one free report a year and if you need an additional more current one, it will be available for a small fee. Reports are usually available online. Your current rating will be a key factor in the finance company deciding whether you fall under the bad credit car loan category and the amount of interest you will pay. The lower your credit rating, the higher will be the rate of interest. This is only fair. As far as the financier is concerned, the lower your credit rating, the high the risk he is taking in lending you the money and he has to justify this by getting higher returns.

Before applying for a car loan in Ottawa, pay off as much of your outstanding debt as possible. The lower your total outstanding debt, the better your chances of getting financing. Even if you are classified as a bad credit car loan in Brockville, the fact that you have paid off other lenders will work in your favor.

A common misconception is that having a large number of credit cards raises your credit rating. This is fine if you have had a consistently good credit record. But if your rating is or has been poor, a lender who is willing to give you a bad credit car loan may have his doubts increased by the fact that a person in your position has too many open lines of credit and may fall into a debt trap and be unable to repay his debts. Having just one or two credit cards will indicate that you are controlling your finances.

Limit the number of enquiries made on your credit report. Every enquiry stays on record for at least two years, even the ones you make yourself. A potential lender, on finding too many enquiries on your credit report may think that you are still running up debt and that other finance companies have rejected your loan applications. This could change your status from a bad credit car loan to a rejected application.

Stability counts. Irrespective of your past record, the fact that you have been staying at the same place for a reasonable period of time (say at least one year) and have had a reasonable tenure in your current job will serve to indicate that you are in a stable position in your life and be a positive influence on the lender’s decision to give you the loan.

Now Is The Time To Fix Your Bad Credit Score

 

 

Most people been in a situation where we need to get some form of financial assistance from lending institutions such as banks. We may have to get a car loan in Ottawa or maybe a home loan. We may even want apply for loans to cover during emergency situations. However, when you go to these lending institutions to get some financial help, they first need to do a credit check before granting you a loan. Of course, these institutions are usually private companies who don’t want to risk losing their money to somebody with a bad credit score.

Credit reports contain all your loan transactions. If you have had previous loans that you were not able to pay, then they will contribute to giving you a bad credit score or rating, which will consequentially require you to fix your bad credit score. All your loan transactions are summarized and rated which gives you your credit score.

The higher your credit score, the better. That means you’ve been a responsible loan payer. A lower credit score may mean that you don’t have enough credit history yet, or that you were not able to pay off a majority of your loans. With a bad credit score, it will definitely be hard for you to obtain new credit, thus you need to fix your bad credit score immediately.

The financial market favors those with high credit score. If your credit score is bad, there are a lot of benefits that may not be available for you. For example, low interest car loans in Brockville are offered to those with high credit scores. They’re also offered better deals on mortgages.

Even if you don’t think you’ll need a loan in the near future, you should start taking steps to fix your credit score. Nobody exactly knows when a loan can come in handy. Usually, financial shortages cannot be predicted. It’s always better to be ready for that unexpected moment when you need to apply for a car loan in Ottawa.

The first thing that you need to do to fix your bad credit score will be to obtain a credit report. It’s highly recommended to get a copy of your credit reports from the three major credit reporting bureaus, namely: Experian, TransUnion and Equifax. Although these three bureaus may follow the same rules in computing for your score, there may some discrepancies in the data that they were able to gather.

To be able to fix your credit score, you need to know what your credit score is and all the things that are written on your credit report. Although it happens rarely, but it does happen that there maybe some information written on them that you don’t have any idea about. For example, it may reflect a loan that you don’t remember applying for. Or maybe a paid loan that still shows to be unpaid.

When these errors occur, what you need to do is to contact the creditor responsible and explain your side. You shouldn’t have a difficult time in doing this since most creditors will gladly help you out to fix a bad credit rating.

When you have checked that your credit score report is error free, then you need to start working on any negative remarks in the report. If you haven’t paid your loans on time, most creditors may leave negative comments in your credit report. You might want to try to talk it out with the creditor.