All Credit Accepted

In your late adolescence and early adulthood, the importance of your credit score will be drilled into your head. From credit cards to mortgages, nearly every item that must be financed will focus on those three imperative numbers. Not only do they determine if someone is going to offer you money in the first place, but also whether or not they’re going to gouge you with high interest for the life of the loan. There is a reason your parents, and nearly every adult you meet, will stress how important your credit is, and how to protect it. It really is important.

So what if you’re one of the many Americans that have made some mistakes, or have allowed your credit card bills to fall by the wayside in order to feed your family? Does this mean there is no hope for your future? Absolutely not, but you are going to pay for those mistakes. While many companies will still offer a loan or special financing, it may come attached to terms that you’re not going to like, and thus begins the ultimate dichotomy. How do you rebuild your credit without the terms you’re being offered, but, on the flipside, do you want to take high-interest rates in order to make something happen?

Many dealerships offer special financing. This is a polite way of saying that they’ll do anything they can to get you into a car. What most people don’t understand, however, is that this doesn’t mean you’re going to get the $189 a month deal that flashes across the television during commercial breaks. The average person in this country isn’t going to qualify for 0.9% financing unless their credit score is near perfect or they have a boatload of money to put down on a car.

Certainly, the terms for buying a car with bad credit are going to be far from ideal, and this is to be expected. However, the amount of people that don’t anticipate these terms is astounding. Think about it this way, if you lend someone money and they continually don’t pay it back, how willing are you to keep lending? This is what a bank sees when you have a poor credit history. They see a person who hasn’t paid back debts in the past, or simply hasn’t even asked for money in such a long time that they’re not sure if they can be trusted.

Some credit scores depend largely on whether or not you’ve had a car loan in recent years. So when you thought you were being smart by paying cash for beaters these past ten years, to a bank you look risky. If you’re the person who pays for everything in cash, rents an apartment, and borrows money for expenditures from family, you’re a risk to a bank. If they can’t see your history, they don’t feel safe putting a hefty loan into your hands, whether you’re a trustworthy person or not.

Many people lament the decisions of banks because they can’t get financing. However, financing isn’t personal. A bank doesn’t care if you lost your job and that’s why you couldn’t pay your credit card bill for several years. To them, you look like a risk and they’re not going to work with you for free. When you apply for special financing with a dealership, you’ll be assigned a tier number. The lower the tier, the better the deal. Many special financing cases come back as a higher tier number, which means they’re going to charge astronomical interest, or they’re going to want a tremendous down payment.

Right now, you’re probably questioning how they think the down payment is going to happen when you couldn’t afford to pay your bills two years ago. Here’s the thing though, banks don’t care. They want to ensure that they’re going to get their money back, so they’re not going to offer it for free. All too often, people believe special financing is miracle work, and it’s not. The truth is, you’re going to have to pay for your past mistakes, and in some cases, you’ll pay heavily.

The whole bad credit/no credit guaranteed financing offers do not come without strings attached. Some programs may offer to cover you, with certain stipulations. In some instances, the financing company will install a device in your car that will disable it if regular payments aren’t made. Some banks will agree to the financing, but only if you’re willing to put up 20% of the asking price for the car. Others will offer the money but expect a very high amount to be repaid in interest, all because they took the initial risk. If you’re one of the many people that have made mistakes in your past and your credit suffered, as a result, don’t fret. The best way to improve your credit is to get more of it and prove that you’re trustworthy, and a car payment is a great way to do so. It’s not going to be easy, but it may help get you over a hump where more banks will be willing to work with you in the future. By knowing where you stand and being willing to pay, it is possible to get the car you want and improve your credit, but don’t expect miracles.