You have tried it all. Applying to several banks and credit unions has gotten you nowhere. Trying to get the funds in a short amount of time has proven difficult. Asking friends or family members for help is just not possible. It may feel like you have no way to find the financing you need to purchase the car that you want. There is nothing left to do, so that is the end of it all. No car for you. Right? It is easy to feel like this when you are trying to figure out the financing for a new car purchase. Automotive financing is difficult to secure when you do not have the best financial or credit history. Many people struggle with bad credit, even when they have tried to do everything they can to build it up and improve it over the years. Unfortunately, most banks and other financial providers do not recognize your effort in their decision-making process. If you do not have the right credit, you are usually out of luck. Even when it seems like hope is lost, it is not. When most financial institutions have nothing to offer there are a few different options you may not know about to try, including Buy Here Pay Here in Indianapolis. Below are a few quick tips on alternative financing options. All hope is certainly not lost.
Improving Your Bad Credit
Most people do not realize that it is possible to improve bad credit in a short amount of time. You will not turn bad credit into excellent credit overnight, but small steps can boost your scores up a little bit. If you are on the border between bad to good or just at the cut off of some bank’s application credit limits, this small amount of improvement may be enough to get you the financing you need while keeping yourself on the right path to improving your credit.
The key to short term, positive changes with your credit is taking care of debt. A part of the credit score formula takes into account the amount of debt (and the different debt types) you have. Banks and other financial providers will access your debt separately or through your credit score to determine how likely you are to keep up with monthly payments as you pay off a car loan. Individuals with high amounts of debt, particularly from credit cards, are seen as less reliable and more of a risk.
Paying off some debt, even if it is just a small portion of the total amount, can have a near-instant impact on your credit score. Since most credit scores are reconfigured every month, the improvements you make will likely have an effect the next time the score is updated. The exact impact will depend on the amount of the debt you can pay off and how each specific credit bureau calculates and updates the score.
The difficult thing to decide is how much to pay the debt off versus pay for the new car that you want. If you have some money to spend, you can either reduce the debt or use it towards the down payment of the car. This decision will depend on the amount of money you actually have in the first place. If there is a required down payment or you want to reduce the final price of the loan you will be paying off, it is smart to put this money toward the car itself.
Paying off some debt over a down payment does have some advantages in the right circumstances. If you are close to paying off the debt entirely, paying extra will free you up later on to tackle the automotive payments you will have. You may also spend less on an auto loan if you can secure a small loan amount or better terms/rates.
Another way to improve your credit score in a short amount of time is fixing issues and errors that have affected the score in the first place. Sometimes, credit bureaus receive inaccurate or outdated information that needlessly lower your score. If you have payments that show up as late or incomplete but were on time, for example, this type of error will give you a lower score than you deserve.
The good news is all credit reporting bureaus have to take steps to help you fix these issues if you can provide enough evidence that there is an issue. Quite often, this is as easy as calling the bureau and giving them the necessary documents or receipts so that they can see the issue for themselves. When this happens, they will make the necessary changes, and you should see the results the next time the credit score is updated.
Many people allow these types of issues to go unnoticed or do not even know to look for them in the first place. When you take the time to review your credit score and the things that influence it, you may stumble across errors that you can address immediately. It is best to take care of these issues before you apply to auto loan providers so you increase your chance of success.
Buy Here Pay Here
Improving your credit score is just one route to take when looking to buy a new vehicle. Another potential avenue to find the loan you need is through the dealership itself. This is known as Buy Here Pay Here where dealerships cut out the need for banks and credit unions, offering an auto loan straight from the source to its customers. They can often offer you a bad credit loan regardless of your specific financial situation.