Car Finance Tips for People With Bad Credit

If you want to buy a car, you may have realised that:

>> You have some bad credit as a result of some issues in the past that are listed in your credit file; and

>> Your local bank branch has determined that you are not eligible for a car loan.

Do not worry. You are still eligible for a car loan because lenders/credit providers do provide second chance to people with bad credit. However, you will need to:

>> Show the lender/credit provider that you have improved your credit history; and

>> Have a reasonable explanation for any defaults listed in your credit file.

When you have bad credit, you need to put in extra efforts and ensure the lender/credit provider of regular payments. Here are five important tips that you should consider and which may benefit you:

1. Take the Time to Clean Up Your Credit File

This is the most obvious tip, which you can do on your own before applying for a car finance. Following are a few ways of cleaning up your credit file:

If you have any issues on your file that can be paid, you should pay them off as quickly as you can.

>> If you have any bad credit listings that you are disputing with a creditor, you should address these issues as quickly as possible and try to come to some resolution with the creditor.

>> If you cannot come to a final resolution, you should get some assistance from an intermediary that can mediate for you such as the industry ombudsman or a solicitor.

2. Provide a Reasonable Explanation of any Adverse Credit History

If you have any adverse credit history listed in your file, the lenders/credit providers will require you to provide a reasonable explanation as to why you obtained the adverse credit history, and they will need to be satisfied with your explanation.

3. Speak to a Qualified Professional

It is wise to speak to a professionally qualified finance broker as he/she:

>> Deals with a number of lenders/credit providers on a regular daily basis, and he/she should know the credit policy requirements and guidelines of each and every lender/credit provider;

>> Can advise you of the “steps” you can take to rectify your credit history, and also the “time frames” required to be undertaken by you; and

>> Can advise you and show you ways of demonstrating your stable financial condition to the lender/credit provider.

4. Wait for Your Bad Credit to be Automatically Removed from Your Credit File

When you have paid and settled any outstanding/unpaid matters appearing on your credit file, they will drop off your credit file automatically. You may consider applying for a car loan after they are removed from your credit file.

5. Be Careful and Don’t Apply for too many Loans

Remember, you should only place credit enquiries on your credit file that are necessary. It is because every time you apply for any type of credit, the lenders/credit providers are required to place an enquiry on your credit file. So, when they review your credit file, they will be able to see all the credit enquiries you have made. Also, you may even find yourself being listed as a bad credit client due to several enquiries made on your credit file.

Un-discharged from Bankruptcy

If you are currently un-discharged from a bankruptcy or a Part IX debt agreement, it would be almost impossible to obtain a car loan. In such a situation, you will need to have your bankruptcy or Part IX debt agreement discharged. Also, you will have to wait for a couple of months (minimum 12 months) before applying for a car loan.

Now that you know the five important tips for buying a car with bad credit, do not worry. Follow the tips and get ready to buy your favourite car.

Bad Credit Loans – Specialised Loans for People With a Poor or a Bad Credit History

There are many reasons why you might have a bad credit rating. However, having a poor or bad credit should not be a major stumbling block to getting a home loan or any other finance arrangement.

What Reasons determine a Poor or a Bad Credit Rating?

There are many reasons why you might have a bad credit rating. Interestingly, your rating is not always a result of negligence or inability to make repayments. Here is a list of how you can get a bad credit rating:

>> If you never had a loan or never owned a credit card because mainstream lenders cannot access any evidence to show that you can manage your borrowings successfully;

>> If you have a Default listed against you because you failed to keep up with your regular payments on a previous loan or finance arrangement; or

>> If you have a Court Judgement listed against you.

Why a Bad or a Poor Credit Rating does not have to be a Stumbling Block to Getting a Loan?

It is impossible to borrow from any of the mainstream lenders because your credit ratings will prevent you from fulfilling their strict lending guidelines.

However, there is a possibility that you can still get a loan. It is because there are a number of specialised lenders/credit providers who specialise in providing bad credit loans to people with a bad or a poor credit history.

Taking help of an Expert Finance Broker

Seek advice from a professionally qualified and expert finance broker who will put you in a better position. When assessing your specific request for finance or mortgage loan, the finance broker will:

>> Look at your income, nature of your employment and your Loan-to-Value Ratio (LVR);

>> Look at your accumulated savings and the period of your savings history;

>> Look past your credit file and will discuss with you your credit blemish;

>> Require you to be fully transparent. You will need to provide a thorough explanation of your credit misdemeanour;

>> Be upfront with you. By informing you that the interest rates are higher for clients with blemished credit history; and

>> Discuss with you the reasoning or situation that led to the listing of either a Default, Court Judgement, Part 9 Agreement or the Bankruptcy.

Truly, having an expert finance broker on your side will save you lots of time in obtaining bad credit loan. So, don’t take tension of your credit problems.