Credit Myths that Affect Car Buying

Credit Myths that Affect Car Buying

Buying a new car can be an exciting and positive experience for many people. After shopping around, once you find a car that you love and a model that fits your budget, the next step is often securing financing. In most cases, this is handled right at the car dealership and it is usually a somewhat simple process. If you do not have good credit however, this can be an entirely different, overwhelming and unpleasant situation. Rejected for financing and auto loans in the past, most people with bad credit accept the fact they may never have the opportunity to get an auto loan again.  So often, they never even try again.Credit Myths that affect car buying

If you have bad credit and you need to purchase a vehicle and obtain financing, you may be unaware that there are options available.  Before we discuss these options, let’s review some of the common myths and misconceptions about credit, car buying and auto loans.

One common myth is that checking your credit will hurt your credit score.  Many people feel that the more they check their credit score, the worse it will become. This is absolutely untrue.  You are entitled (and have the right) to know your credit score and what is being reported on your credit reports. According Equifax, “Your credit history and credit score are vital pieces of information that are important to your overall financial wellbeing. You should view your credit history and your credit score to better understand your current credit position. That way, you can decide whether to pursue a credit application now or wait until your credit history and credit score change” Checking your credit history also allows you to spot any information that may be inaccurate and dispute any possible instances of fraud. There is nothing wrong with checking your credit history and it is a good idea to be up to date on your credit status before you start the car buying process.
Many consumers feel strongly that if they have poor credit, no lender will be willing to work with them. This is incorrect.  There are many lenders who specifically cater to people with credit challenges.  Whether you have bad credit or no credit at all, credit score alone does not determine if you get a loan; it may only impact factors such as vehicle options and interest rate. Other factors in qualifying for a loan will include your income amount, employment history and stability and debt to income ratio.

Another myth is that many consumers with bad credit feel that their credit score will get worse if they do get a new auto loan. While a new auto loan will increase your debt-to-income ratio, there is no indication that obtaining an auto loan will worsen your situation. In fact, a new auto loan may help to increase your credit score over time. Timely monthly payments are the key to not only stabilizing but also improving your credit score.

Don’t let your car shopping be paralyzed by these myths regarding credit and car financing.  There are options available to you. Whether you have bad credit, no credit or past financial or bankruptcy troubles, there are car loans and financing options available to you. is a leading provider of auto loans and car financing options for individuals with bad credit, bankruptcy issues and other financial problems. They have partnerships with reputable auto dealerships across the nation that can offer car loans and new or used car financing to consumers with bad credit.  Let help you get the financing you need to purchase a new vehicle today.