It doesn’t have to be about poor credit. Consumers with poor credit can sometimes be grouped together with people who have good credit. However, they are two very different things.
Bad credit is a sign that someone has made financial mistakes in the past. These include late payments, bankruptcy, defaults, heavy debt loads, and/or bankruptcy.
A person with no credit is also called credit invisible. They don’t have sufficient information to give credit bureaus a reliable rating. They don’t make past financial mistakes and don’t report them to credit bureaus. However, they don’t have any traceable past history that lenders can see.
These loans are still considered high-risk by most banks, credit unions, and independent lenders. You can’t see what you don’t know. People with no credit often get the same terms as those with poor credit for auto loans.
This doesn’t mean that you won’t be able to get the auto loan that you need. Instead of working with traditional banks, you can focus your efforts on lenders who specialize in bad credit financing. This could mean working with a local dealership that deals in bad credit cars or sending a request for a loan to one of these online lending networks.
Remember that an auto loan for bad credit will have a higher interest rate then a loan for someone with good credit. However, if you don’t have any past mistakes, your loan can be used to build a credit history and then refinance with a loan with a lower interest rate and a longer term.
To build a credit score, you may need to pay for six months. However, refinancing can help you save more over the course of your loan.
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