Living with bad credit can be challenging, especially when trying to get approved for a car loan. Most consumers believe that they need a high credit score to get approved for a car loan. However, there are many lenders who specialize in helping customers with challenged credit. Looking for and being approved for an auto loan when you have a low credit score can be a bit difficult but not impossible so do not be discouraged from even trying.
Do You Have Bad Credit?
In Canada, credit scores range from 300 to 900. Bad credit Score is when you have a score within the 300 to 600 range while a good credit score is in the range of 700 to 900. A low credit score can be the result of many factors, one of which could be minimum monthly payments, or an error on your credit report, like the wrong address or name. Also applying for too many credit products in a short period of time can negatively impact your credit score.
Car loans are generally available from a financial institution (bank, credit union, etc.) or a car dealership (or online retailer). Canadians with less-than-perfect credit usually have a hard time getting approved for an auto loan through a major financial institution like a bank because banks do not typically work with borrowers with a credit score below 650.
How to own a car with a low credit score
The good news is that regardless of whether you have a low credit score when it comes to owning a car or finding the right car loan, you have options. Here are a few important things to consider and prepare to give yourself a better chance at getting great approval.
- Understand your budget – If you want to find vehicle options that fit your budget, you should form an idea of how much you can afford every month. The car loan calculator on our website will give you a rough estimate of what to expect. If you want to trade in your current vehicle for something newer, your trade-in vehicle will lower your monthly payment, so make sure you factor that in.
- Get pre-approved online – While some dealerships and lenders are not equipped to help bad credit car loan Alberta customers, online retailers like Theautoproviders.ca can help you get pre-qualified for free, and connect you with dozens of great dealer partners. With a pre-approval in your back pocket, you’ll know exactly how much you can afford, saving you a lot of time and frustration.
- Consider a used vehicle – If you want to get approved finance on a great deal, consider a pre-owned vehicle. It’s extremely robust in Canada, so whether you want a truck, SUV, or passenger car, you’re bound to find what you’re looking for there. You’ll get almost all the benefits of a new car but at a lower purchase price. Also, preowned vehicles hold their value much longer.
- Decide on a down payment – Decide whether or not you want to make a down payment and how much your down payment should be. The down payment is a percentage of the purchase price paid upfront. With a down payment, your chances of approval are even higher, and also reduce your monthly payments. But a down payment is not possible for everyone, and there are also no money-down options you can explore. The theautoproviders.ca can help you find the option that’s right for you.
- Decide on a co-signer – A co-signer is a trusted friend or family member who agrees to share responsibility for your loan. A co-signer can boost your chances of approval because he/she decreases the level of risk for the lender.
Let the bad credit score not deter you from owning a vehicle.
Don’t let a bad credit low credit score stop you from getting into the vehicle you need. We have dozens of dealer partners in your area with thousands of vehicles in stock. We can help you find the perfect car today, it only takes a few minutes.
With our quick, secure, and free application, you apply today and drive tomorrow! buying a car with bad credit