A bad credit rating is a lot easier to acquire than many folks realize. It doesn’t take much: you might miss a few credit-card payments, a friend or relative you’ve sponsored doesn’t come through, an accident or illness in the family causes unexpected expenses or even time-off from work. Every delayed payment goes on the record, and sooner or later your credit score has plummeted.
Most of us can muddle through such a situation, at least until we really need that good credit score to purchase a car. No car, no way to get to work, no income: it’s the classic Catch 22. The bad credit rating will block honest credit sources and leave us at the mercy of the dishonest ones.But wait a minute. The situation isn’t as impossible as it’s often made out to be. Auto loans for bad credit from honest sources of finance can be negotiated. It’ll take some research and preparation, but there is a way to get the car you need.
Research Your Credit Rating
Start by figuring out exactly what your credit rating is. This will take a little work on your part, but it’s a job that will bring positive results. You can get a free copy of your credit report by mail. Equifax Canada and Transunion Canada are the two national credit bureaus. Each has a website and details about getting the report are available there, so choose one of them and order your report as soon as possible. (You can get an instant credit report online, but you’ll need to pay a small charge for this service.)
Once you’ve received your credit report, you’ll see that its information covers the past 6 years. It lists all the loans you’ve taken out, whether you’ve made timely payments, and your credit limits. Go over the credit report with a fine-tooth comb, because errors do occur (at an estimated rate of 10-33%). These errors could affect your credit score. If you find an error, contact the credit bureau immediately. And don’t be fooled by companies that claim to be able to fix a credit rating for a price. At best they’ll just notice errors in the report that you could have taken care of yourself. According to Industry Canada, you’re better off avoiding these companies.
There are steps you can take to repair a bad credit rating. If you can get by for a little longer without that car, spend some time getting down to 75% of your credit limit. Get any collections removed. Once your rating has risen a bit, you’ll find it easier to get that auto loan.
There are Ways to Get Auto Loans For Bad Credit
But what if you need wheels right now? The good news is that there are honest and open organizations willing and able to give their customers auto loans for bad credit situations.
The bottom line is this: do you have an annual income? Whether you’re self-employed or working for someone else, as long as you can demonstrate a regular income, you can find a company that will give you credit. You’ll need to do some research in this regard, however. The size of the down-payment and the interest rate can vary widely across companies extending auto loans for bad credit, so study the market carefully. You can find honest lenders to help you in every province across Canada. There are several websites that can help you locate these lenders, but be careful: avoid any site that asks you for your social insurance number and other such data.
Don’t settle for a high-interest loan from a shady operator. With a little effort on your part, you’ll find the company that will get you back in the driver’s seat in timely fashion.