Subprime might not sound like a bad word, but it’s definitely not a good one when it comes to BC auto credit. If you’ve landed in the subprime consumer category, you have bad credit, poor credit or credit problems. Bottom line, when you get ready to buy a new vehicle, you will likely face a few more challenges than people with better credit scores. But, don’t dismay. There is good news. British Columbia auto credit is available through lenders willing to take a chance on consumers with a less-than-perfect credit history. Plus, using BC auto credit is a great way to improve your credit score and get out of the subprime category.
Understanding Prime Categories
Anyone who has borrowed money or has a credit card gets a FICO or Beacon score between 300 and 900. The higher your number, the better your credit. Your credit score also puts you in a prime lending category.
Good to great credit, with scores above 660, gets you prime lending status. Loan approval is easier. Interest rates are lower. Security deposits are rarely required.
For credit scores from 601 to 660
For credit scores from 501 to 600. Loans approval often includes higher interest rates and security deposits.
• Deep subprime
For credit scores 500 and under
Landing on the Subprime Scale
Getting and keeping a good Beacon score means paying debts on time. Not paying on time lowers the score, but how many late payments does it take to lower your credit score? Here’s how it works.
• Late Payments
Late payments show up on credit reports for being 30, 60, 90, 120 or 150 days late.
• Late vs. Really Late
The later the payment is the more it impacts a credit score, but recently late payments sometimes have a bigger impact. For example, someone with excellent credit could be penalized with a 100-point drop in their credit score after one 30-day delinquency. On the other hand, someone with fair credit with a couple of late payments from a year ago could only see a 60-to-80 point drop in their credit score if they have a new 30 day late payment.
• Other penalties
Late payments stay on your record for seven years and creditors will likely charge late fees. They may also raise your interest rate.
Getting Out of the Subprime Category
Your credit score includes five parts; types of credit, new credit, amount you owe, length of your credit history and payment history. The most important parts are your payment history and how much you owe. These are the areas to focus on if you’re trying to get out of the bad credit subprime category.
• Start by checking your credit report for errors. If you find an error, dispute it.
• Take on more different kinds of debt, such as credit cards or BC auto credit loans.
• Raise your credit card limits.
• Make all future payments on time.
• Pay more than the minimum. If possible, make two payments per month.
Getting a BC Auto Credit Loan
So, you’re considered a subprime borrower. It’s not the end of the financial world. Regardless of how you ended up in this category, there are still ways to get BC auto credit.
Start online, and find a lender specifically offering bad credit auto loans. The right lender understands that your need for a car is more important that your credit report. As soon as you get approval, you can get the auto you need, and start building towards a prime credit rating.