You aren't lost!
If you have a low credit score, sometimes it feels like there are no options, lost in the middle of a lonely road with nowhere to turn. The truth is, you have many options. It’s important that you know what they are, and make smart decisions.
Now, more than ever, it’s important for you to make the right call, especially when it comes to your credit. You can’t afford to make a mistake, or make a decision that could impact your credit worse. Worse, there are folks out there who will take advantage of your situation, helping themselves first, disguised as helping you.
Here are some options, how they can help, and how they can hurt. Consider each carefully before you make a decision.
Option #1. Buy Here Pay Here
Buy Here Pay Here lots should be considered a last resort, not the first. Buy Here Pay Here lots will get you into a car, but the interest rates are through the roof. The price of the car is very often inflated, so you aren’t getting a good deal. Worse, there’s little margin for error. One wrong move on your part and you could find your car being towed away, along with the money you paid for it so far.
Finally, Buy Here Pay Here sales don’t always impact your credit score in a positive way. Remember, you are looking to rebuild your credit, and Buy Here Pay Here, almost by definition, doesn’t always seek to do that.
Action Step: Look around first. Check to see if someone will trust your story and give you a fair deal on an auto loan instead. If all else fails, check reviews on the Buy Here Pay Here lot you’re thinking about, and try to make the best out of a bad situation. Just be careful.
Option #2. Established Dealerships
If you can find one that will give you a loan, then these are great options. They are usually reputable, deal in quality cars, and may offer some kind of short term warranty and protection for your purchase. They usually have many cars to choose from, and professional sales people who will take good care of you. It also seems positive that some dealerships advertise for folks with bad credit. They promise and guarantee delivery.
Two things to watch for:
a). Too often though, those ads that sound so promising can be part of a “bait and switch” marketing game, designed to advertise low price. The fine print on the ad can leave you out in the cold. Why? Because…
b) Franchise dealerships deal with major banks and lending institutions. That means, your credit score matters to them. And if it's low, you don’t get a loan. Unfortunately, as we say at the Ashland Community Credit Union, “Your credit score is a number…you are a person” is not always true elsewhere.
Action Step: Get a Loan! One way to combat the negatives here is to get a loan. Yes, we know, you have a low credit score. But at the Ashland Community Credit Union, we care more about your story. We know bad things happen to good people, and we are willing to take a chance on you. Together, we can help you get pre-approved to buy the car you want from the dealership. Find someone who will believe in you.
Option #3: Private owners
A strong option! The prices are usually lower. And you can meet the owner and imagine how she may have cared for the car. It’s often simpler, and the owner doesn’t care about your credit. But you need to do two things:
1). Look the vehicle over with a friend to make sure there are no obvious mechanical issues. Research the price online to make sure it’s a good deal. The Ashland Community Credit Union can help you with this.
2). Come prepared to buy with a pre-approved loan.
Action Step: Get pre-approved! When you visit the Ashland Community Credit Union, we are going to give you a loan, unless you can talk us out of it. You’ll get a fair rate, for the fair amount for your situation. This will help your credit score when you pay it back in a timely manner. And…you’ll be pre-approved for a loan when you go to see the seller. If you think you won’t qualify, let us try!
The biggest myth out there for low credit buyers is that they are stuck, and out of luck. Do not believe it. Visit the Ashland Community Credit Union and let us help you come up with a plan, and get a loan to make it happen.
