In most instances there is only one way for credit challenged Canadian consumers to once again qualify for Toronto auto finance with regular interest rates and that would be auto loans for bad credit.
Do you have bad credit?
If you’re reading this, it could mean that you belong to a growing number of consumers that, because of an unfortunate economic event, have bad credit. If you’re looking for an auto loan, Auto Net Financial can help you. By filling out our online Toronto auto finance car loans with bad credit application there is a good chance that you can begin a new chapter in your life by getting approved at one of our affiliate dealers for a bad credit car loan. You will then be on the way to re-establishing your auto credit and raising your credit scores.
Your alternative, buying a vehicle from a car dealer that offers in house financing, could pose a problem if you are hoping to reestablish your car credit. Because these dealers don’t report your payment history to any of the credit bureaus, the positive credit history that you have with them will not be reflected on your credit report.
On the other hand, taking out a loan with a bad credit lender that does report to the bureaus while making a mistake, such as choosing a vehicle that’s too expensive, can also be a problem. In many cases, this can stretch your budget and even result in a possible repossession. If this happens, rebuilding your auto credit will be set back at least a year since most Toronto auto finance bad credit auto loan lenders will only consider applicants with an auto repossession on their credit report that’s over a year old.
What you’ll need to do
We’ve heard this question many times: “Why should I get a Toronto auto finance bad credit car loan? I can pay cash for a car and get a credit card to rebuild my credit.” Even though this would seem like a logical approach, there is at least one reason why it probably won’t work – even if timely payments on your credit card do raise your credit score. Here is why:
Revolving and installment loans
A charge card is a type of revolving credit. This means that if you don’t pay off the balance every month, the credit card company will allow you to carry over (or revolve) your remaining balance to the next month – while charging you interest for this privilege.
A car loan using Toronto auto finance is a type of installment credit. With installment credit, you sign a loan contract that states you will pay back the amount borrowed, plus interest, at a set amount per month for a fixed term (for example, $300 per month for 48 months). As a rule, installment credit limits are usually much higher than revolving credit limits and require a higher monthly payment as a percentage of the loan balance. Installment credit contracts are also much less flexible to any changes in the loan terms, meaning that the buyer has to exercise more diligence in paying back the loan.
Toronto auto finance lenders
In determining your credit score, the two credit bureaus will include both types of credit. And while automotive lenders will look at your entire credit history they put a special emphasis on your installment car credit history. To put it another way, while a good payment history with a credit card will help your credit score, it is not the strongest type of credit to bring to the table if you’re applying for Toronto auto finance.
For this reason, many applicants with decent credit scores can still be turned down for a car loan if they’ve never had an auto loan before or if it turns out that that one of their previous car loans had a spotty payment history. In both of these cases, the applicants might have to prove themselves by applying for a car loan and establishing a solid payment history through another lender – and in most cases, that lender will have to be a Toronto auto finance bad credit lender that caters to a lower credit tier of customers.
Applying for a Toronto auto finance bad credit auto loan
At Auto Net Financial, we specialize in placing Canadian customers with limited or bad credit with dealers that can help them get financed. These affiliate dealers are knowledgeable and treat every customer that walks through their doors with understanding and respect. If you have any questions that our web site can’t answer, feel free to call us at the toll free number listed on every page.
So if you are serious about getting your credit back on track, why not begin a new chapter in your life by filling out our bad credit car loan application now.
