If you keep running into roadblocks in your attempts to rebuild your credit, the answer may be at hand, but it is going to cost you.
Over the last few years, the economy has laid waste to millions of credit reports. If you lost a job and fell behind on your bills, you know what I am talking about. Maybe you leaned on your home equity line of credit more than you should have and when you home lost value; the bank froze your credit line. Without a backup plan to ease you through the rough spots, your credit profile became a house of cards, and began its slow motion collapse
After struggling for a couple of years, you worked through your financial, work, and housing issues but your credit….it is a mess. Your once pristine 750-credit score profile is in shambles. You still have some good credit, but it is old. Your credit score ,let us not go there.
You cannot get a home loan to buy a house. Even if you have a 750 credit bureau score, you will not be able to secure the unbelievably low mortgage rates that are currently below 4%, if you owe more on your home than it is worth. How much harder is it for you if you are trying reestablish good credit in a market where conservative loan underwriting is the new normal?
What is a good person with some past credit problems suppose to do? The answer to this question may surprise you. Go buy a car.
General Motors, Ford, Chrysler, European and Korean manufactures were all profitable by the first quarter of 2011, following the industry collapsed in 2008 – 09. In 2009, if your credit score was under 680, you could not finance a car without a large down payment. Today that has changed.
My contacts in the auto finance industry all say that getting credit to finance a vehicle is almost back to the pre-recession frenzy. The main difference is the banks are not
extending credit and terms on higher mile vehicle as they did before, smart move. The other change is more borrowers are required to verify income than in the past.
You can thank the expiration of the cash for clunker program in 2010, for the return of liberal lending standards. Auto sales dropped and the industry was looking for a solution to increase revenue. One option was to raise prices at the expense of sales. The alternative was to expand your customer base by lending to the millions of buyers who were shut out of the market when the loan underwriting criteria tightened up. The auto industry and the lenders supporting the industry elected to loosen up and sell more cars.
If your credit is rough but you have a good job and income, the auto industry is looking for you. If your credit is, all bad you still might not get credit but walk in with 30 to 50 percent down and a company like Santander might take a chance. Ally Finance and Capital One are making loans on rough credit but there are others. If you tried two years ago and the auto authorities said no, now is the time to try again.
You need to have a stable job and an ability to pay. If your credit is bad, and your income and job are not verifiable, your chances of financing a car are slim to none. No income verification loans are a thing of the past for sub-prime auto buyers. Avoid
older model, higher mile vehicles as most lenders have set age and mile limits
for the vehicle they finance. Do you have a recent bankruptcy? You in luck, you have a decent chance of getting financed as long as you have stable income and can afford a payment.
Individuals with credit scores of 620 and lower in many cases will get financing. Past negative credit such as a bankruptcy and home foreclosure in many cases will not eliminate your chance of securing auto financing as long as your job is stable and your income is sufficient. If you have multiple vehicle repossessions in the past couple years, do not get you hopes up too high. Some lenders will qualify non-prime borrowers for a monthly auto payment that is equal to 20 percent of their gross income. You might be able to get by without a down payment.
Show up at the car dealer with a pay stub and work number and the dealer will do the
rest. Buying a vehicle is not cheap, but some auto finance companies have loosened their lending standards allowing those with negative credit to get financing when mortgage and credit companies say no. Yes, it is true; you can drive yourself to better credit.
Credit This! 