Don't Let Bad Credit Hold You Back From A Car Loan

By: Brenden Somerville   |   24 Aug 2016
Man showing empty pockets

So you’ve got your eye on one of our pre-owned luxury cars for sale. After saving for some time, you know exactly what you want, right down to the year, make, model and colour. But if your credit score is low, getting a new car might be intimidating. Dealerships rely on your credit history to assess your eligibility for a loan and to determine your commitment to repaying it. If you require auto leasing or an auto loan, bad, low or nonexistent credit scores are an immediate red flag. But, at Somerville Auto, we know that sometimes life is unpredictable. Whether you were late on too many payments, are recently divorced, have experienced bankruptcy, or have simply never owned a credit card before, we can help you get behind the wheel of the car you love. Bad credit car loans are easier to come by than you think. A luxury car is never completely out of reach at our dealership, as our informed and friendly credit specialists will work with any client, regardless of your financial situation and past credit history.

What Does Bad Credit Look Like?

Bad credit isn’t always obvious. It doesn’t always mean you’ve maxed out your credit cards, or have gone into the red in your bank accounts. Low credit is generally classified as a score under 629. You can have low credit for a variety of reasons, including a history of making late payments or by not having enough years of a credit history. If you’ve not yet taken out a mortgage or bought a car, chances are this could be you. Your credit score dictates what type of interest you’ll end up paying on your car loan, and a low score means a higher interest rate. So who is usually affected by bad or questionable credit?

  • Recent graduates of a college or university program
  • Current students with no existing credit history
  • New immigrants who have not yet established credit
  • Divorcees with shared assets
  • Victims of bankruptcy or financial disruption

Although these facts may sound less than inviting, the good news is that you don’t necessarily get hit with high interest rates just because of your credit score. Every situation is unique and depending on your past credit history, current financial status and the car you are considering, Somerville Auto’s lending specialists can help you negotiate a fair and affordable financing or leasing program.

What Counts Towards My Credit Score?

Your credit score includes everything associated with that particular card and account: student loans, mortgages, auto loans and credit cards. Your FICO score also calculates your payment history including late payments, how long you have had accounts open, how often you use your accounts and how many new credit lines you have open. So how is it calculated and assessed?

  • Amounts owed: 30%
  • Length of credit history: 15%
  • Credit mix in use: 10%
  • New credit: 10%

How Will Bad Credit Affect My Car Loan?

If you have a good or near perfect credit score, you might even get an auto loan as low as 0%. When you see those advertisements, this is the type of market they cater to. If your score is low, interest rates can skyrocket as high as 20% or 30%, which equates to thousands of dollars in extra fees per year. Things like missing payments, defaulting on loans and having a high debt-to-income ratio all raise red flags for lenders, who will charge a high-interest rate when they do not feel confident they will get back the money they are lending.

Need a new car, but are worried about your credit score? Getting a car loan with bad credit is easy at Somerville Auto. Connect with our credit specialists today, and get the car you love! Need more information Give us a call at 1-(877) 503-5102 to learn more about bad credit auto financing.



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