How your credit score impacts your car buying options in Canada
How your credit score impacts your car buying options in Canada
Posted on September 15, 2022
The answer to the question of what score is required to buy a car in Canada relies on a variety of factors. We will discuss how to obtain the finest available auto loan conditions in Canada.
By the time you're done reading this essay, you'll feel like a pro at purchasing automobiles.
There is no standard credit scoring method (contrary to popular belief)
There are just two credit reporting companies in Canada, and they are Equifax and TransUnion.
Each of these firms is a commercial enterprise that calculates a consumer's credit score using a distinct approach.
You could have a 720 with TransUnion but just a 660 with Equifax; such disparities are common.
You should sign up for credit monitoring with both agencies as a general rule. This will allow you to know, at least generally, where you stand.
These agencies can provide you with your credit score, but different lenders employ different scoring algorithms, so these ratings are at best approximations.
What you must do to obtain an excellent credit rating
You may increase your credit score by performing a few actions. The first one is the simplest, yet few people consider it.
Reduce the debt you already have and, if possible, avoid incurring further debt.
Even if everyone in Canada has debt and household obligations have reached unprecedented levels, you should not follow suit.
After reducing the overall amount of debt you owe, you should ensure that all of your payments are completed on time at all times.
This might be as simple as enrolling in automatic payments, but again, the majority of individuals neglect this step. If you perform these two actions, your credit score should improve.
A decent credit score is only one piece of the puzzle
Even if you have the highest credit score ever, you must still meet all other underwriting conditions to obtain a car loan.
An excellent credit score is advantageous, but you must also earn enough money to satisfy the lender's standards.
Lenders will want to know your regular income and whether or not you can prove it. You will not be able to obtain a loan without bank statements and copies of your income tax notices of assessment.
The best location to obtain an auto loan regardless of credit rating
No matter how terrible your credit is, you should always work with a local vehicle dealership that specializes in helping people with bad credit obtain auto loans if you need a car loan.
If you contact these dealerships immediately, you can obtain a new vehicle more quickly.
When you’re ready for a car lease or loan, get in touch with the Cambridge auto loan experts at Northway Ford for great deals on auto finance.