Bad credit can really interfere with your ability to get the things you need in life, such as a new car. However, at SVG Motors, we're committed to trying to help everyone, regardless of their situation. We understand that bad things can happen to good people.
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First, evaluate your own personal credit situation. There are many things that can lower your credit score but are "forgivable" enough that banks will usually work with you. These are called situational credit problems. For example if you:
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- were laid off or temporarily out of work, you may have missed some payments but once you were on your feet again, you resumed paying your bills on time. This is a situational credit issue, and many banks will look at these types of circumstances and be forgiving enough to grant a loan.
- had a major event happen (hospitalization, accident, etc.) and have incurred a lot of credit card debt, your debt-to-income ratio can be considered a risk to lenders. Explaining your situation and demonstrating your ability to pay back this debt (and doing so on time) can increase your odds of getting a loan.
- went through a divorce and had to absorb costs and debt you weren't accustomed to paying, this can lower your credit score due to inflating your debt-to-income ratio.
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rnThe key to obtaining a vehicle loan when you've had situational credit hiccups is to explain to your loan officer how and why those circumstances happened. Many lenders will understand that sometimes, despite your best efforts, you might need to make a few payments late. Ask your lending officer to look at your entire credit history, and not just your score. By seeing that you were responsibly making payments until a situation happened, and then resumed your on-time payments after the situation was resolved, your lender will see that your credit bump was a temporary problem.
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rnHabitual credit problems
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rnWhen you've had chronic problems making your payments on time, or had problems with having high credit card debt consistently, be prepared to explain why. A long-term history of late or missed payments is an intimidating risk for lenders. They want to be assured that they'll get the money back that they've given to the dealership to buy your car for you. Your best bet is to spend a few months diligently working to make your payments on time before applying for a loan. If you have a high amount of credit card debt, try to reduce your balance to the point where you owe less than 30% of your available limit. For example, if your credit limit is $1000, it is best practice to never have a balance higher than $300 at any time. However, there are many lenders who specialize in offering vehicle loans for those with low credit scores, so don't be discouraged! Also, did you know that it's often easier to get a loan on a brand new vehicle instead of a pre-owned when you have credit issues? The SVG Motors Auto Group includes several new car dealerships and brands, including Chevrolet, Buick, GMC, Cadillac, Chrysler, Dodge, Jeep, Ram and Toyota so no matter what your situation is, the professionals at SVG will do their best to get you into a new (or newer) ride.
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rnRegardless of what your situation is, SVG Motors will try to help you get approved for a loan for a new vehicle. We have a lending specialist that works with all types of people with bruised credit so they can help you navigate to the best deal. Always remember, SVG is not a buy-here-pay-here lot, but our financing experts are ready to go to work for you to help you obtain the credit you deserve for a reputable lender. Your first step in getting that new ride is to fill out the Pre-Approval form on our website, which you can find here.
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