No Need to Wait For Car Loans Canada
Having good credit makes it easier to get a mortgage, credit cards and loans. That’s why some financial advisors suggest that people with bad credit try to improve their credit rating before attempting to get a loan or other financing. While that may be good advice, it is not the best advice for everyone, especially the person with bad credit who needs financing now.
The Waiting Game
Let’s say you need a car, but you have bad credit. Those late payments, bankruptcies and other negative information stay on your credit report for about seven years. Waiting all that time to get car loans Canada mean you will be forced to walk, take public transportation or catch rides with friends.
What’s Your Number?
Three numbers are all that stand between you and what you want to buy. These numbers range from 300 to 900 and they have names: Beacon, FICO and Empirica. What’s so significant about these three numbers? Well, they represent your credit score, which is a report of your credit worthiness. When it comes to getting financing, the higher the score the better. Typically, a good score is anything above 660. Anything below 560 is bad. But, bad may not be as bad as you think. It’s certainly not as bad as it used to be when bad credit was an automatic disqualification for borrowing money. Now, lenders consider more than just your credit score.
The Five Cs of Car Loans Canada
While lenders don’t expect you to be angelic, they do expect you to be upstanding and reliable. In other words, they need to know that you will repay the loan they give you. Your credit score is a good indication of your character, but lenders don’t necessarily hold your past actions against you. In fact, many lenders are more than willing to work with consumers who have improved their debt-paying ways.
Your income, how much current debt you have and your employment history help determine if you have the capacity to handle a loan. This is good news for those with bad credit because it focuses on their potential to pay, not their payment history.
Lenders are more willing to work with high risk clients when those clients have something of value to offer as a collateral guarantee.
If a consumer has investments, savings or other assets, a lender is more willing to offer a loan. These consumers, even those with a poor FICO score, have the means to repay the loan.
This C is flexible because the conditions lenders take into account change and vary from customer to customer. Some things they tend to consider are the borrower’s purpose for the loan, current economic conditions and details of the loan agreement.
Your Loan is Ready
Because lenders consider more than just payment history, there is a very good chance you can get car loans Canada. In fact, there are likely multiple lenders willing to help get back on the road. Some even specialize in auto loans for people with bad credit. Instead of waiting to get a better credit score or saving enough money to pay cash for a car, you can focus on figuring out which lender is right for you and which car you will soon be driving.