http://www.carloanskingston.ca/ When you apply for a car loan, a lender wants to know what your credit score is to determine how you manage your debts.
Bad Credit Car Loans Versus
No Credit Loans
When you apply for a car loan, a lender wants to know what your credit score is to determine how you manage your debts. This helps a bank accurately determine how reliable of a candidate you are when they give you their money. However, you may be wondering if bad credit and no credit work the same in the car industry. The answer is yes, when it comes to buying a car you will be treated the same when applying for bad credit car loans or a loan without any credit history.
Applying for Bad Credit Loan
For bad credit loans, a lender might be hesitant to provide you with a loan because they can see how you have handled your debts in the past. Don’t worry too much; auto financing is a great way to restore your credit and get back to perfecting your credit score. You may just have to settle for a higher interest rate or put a larger down payment on the car.
Lenders are also hesitant to give individuals without any credit history a loan because they have no record of how that person handles debt. Credit is a way for banks to see how successful a person is at managing their debt, and even if you haven’t had the chance to do this, a lender may still not give you the financing you think you deserve. Don’t take it personally. Buying a car is a perfect way to establish credit, and like bad credit car loans, you might also have to put a larger chunk of cash down on the vehicle or go for a loan with a higher interest rate.
Difference Between No Credit and Bad Credit
The only difference between no credit and bad credit when it comes to buying cars is it might take longer for you to see an improvement in your credit score if you previously had less than perfect credit. Individuals with no credit will likely see significant improvement on their credit score in three to six months after financing a vehicle.