500 Credit Score Car Loans: You Can Still Get Approved
500 Credit Score Car Loans: You Can Still Get Approved
Posted on April 12, 2022
Credit scores in Canada range from 300 to 850; if you're looking to get approved for a car loan with 500 credit score or less, then you will need to follow the recommendations of our auto loans team.
In Canada, credit plays a huge role in our day-to-day life; whether applying for an apartment or wanting to buy a car, we love our consumer debt. Your credit score can make or break your chances of getting approved.
Examining your credit reports in greater detail
You must keep track of your credit score, even if it's in the 500 range. This is because identity theft has been prevalent in Canada and significantly worse since the onset of the pandemic.
There is no cost to monitor your credit; you can sign up for access to these services by using apps like Credit Karma which uses TransUnion as the source of your credit report and scoring details.
Your TransUnion score and Equifax score could be entirely different; these agencies use their own unique scoring model.
These agencies could also be using information from alternative sources, which impacts the accuracy of the scores. Look over the reports, and if there are mistakes, you must notify the agency through the dispute link on their website.
The law requires the agencies to purge any errors from your credit report, provided the errors are legitimate, and you report them.
Unfortunately, it can take more than a month before the errors are removed, so you have no time to waste if you want to get approved for a car loan with 500 credit score or less ASAP.
How to rebuild your credit score from 500 up to 720
The two biggest variables that impact your credit score are consistency and time. If you pay your debts consistently over time, then your credit score is going to rise.
Another important variable that goes into your credit score is the sheer amount of debt you are carrying.
If your credit utilization rate is over 30%, your credit score will be considerably lower.
If all of your accounts are current, you can start chipping away at the balances until you are under the 30% threshold.
Once you reach that level, your credit score starts to shoot up by leaps and bounds.
Making a budget and sticking to it
Once you have gotten your credit under control, the next item is creating a budget, so you know where every dollar is going.
This budget should reflect the current economic reality here in Canada, especially with inflation rates over 5% per month. The budget will also help you determine how much cash you can put towards your car payment.
Where to find a car loan in Halton with a 500-credit score
Even though some lenders may have turned you down, you can get a car loan with a 500-credit score, but you won't be able to do it on your own.
You need to contact a dealership in your area that has a great reputation for helping credit-challenged buyers get a car loan.
When you have identified the dealership, reach out and get them to help you.
The dealership will be able to get you approved for the car loan, even with a 500-credit score, and can also help show you how to improve your credit score so you will never be forced to take a bad credit car loan again.
When youāre ready for a car lease or loan, get in touch with the Halton auto loan experts at Northway Ford for great deals on auto finance.
If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.
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