Poor Credit History: What Are Your Options?
For many people, having a car is no longer a luxury but a necessity. This is why it has become increasingly important for drivers to have a reliable, safe, quality vehicle for personal or business use. However, while those with good financial standing and a decent credit rating tend to have no problems getting finance to buy such a vehicle, those with damaged credit history will really struggle.
If you have a damaged credit history and low credit score, your available options will be far more limited than for those with good credit. It is therefore important to do your research and work out how you can get the money you need for your vehicle without resorting to unsavory loan sharks who prey on the vulnerable.
Credit History – Your car credit options with damaged credit
There is no doubt that your car credit options will be far more limited as a result of having poor credit history. While those with good credit can walk into a bank and take out a personal loan, get a credit card to make their purchase, or get a competitive rate on dealership finance, those with damaged credit do not have the same luxury. You therefore need to look at reputable specialist lenders that are able to cater for those with damaged credit.
As someone with poor credit history and a low credit rating, you need to be very careful about the finance option you select for the purchase of your vehicle. You will probably see a lot of ads offering guaranteed finance for those with damage credit, but what does guaranteed car finance really mean? Well, it means that you will be accepted for the finance no matter what your credit history or rating but the terms on which the loans are offered will vary based on applicants’ circumstances and credit.
So, you need to make sure you not only look for a provider that is likely to be able to offer you a car loan with damaged credit but you also need to make sure you look at the terms of the loan. While those with bad credit generally have to pay higher interest rates due to the increased risk they pose, you still need to try and find the most competitive terms and rates based on your circumstances.
Other options for buying a car if you have damaged credit history include the following:
- Using savings: If you have savings put aside, you may want to use these to cover the cost of buying a car. This will enable you to avoid the hassle of trying to get finance and avoid paying interest. However, depending on how much you have in savings, it could leave you in the vulnerable position of having no money put aside for emergencies.
- Secured loan: While those with damaged credit will struggle to get unsecured finance from traditional lenders, you may be able to get a secured loan if you are a homeowner. However, do remember that failure to keep up with repayments could put your home at risk. In addition to this, getting secured finance can be a long and frustrating process.
All of the above are options that you could consider when obtaining new car finance if you have a damaged credit history. However, do make sure you research the options carefully in order to help you make the right decision. Your credit history is a record of your ability to pay, therefore you should look after it