What is bad credit financing in Hamilton?

What is bad credit financing in Hamilton?

Posted on June 16, 2022

You’ve probably seen it advertised on car dealerships around Hamilton, but what is bad credit financing, and is it right for you?

First, we need to know what our credit score is before we decide if going to a lender that offers this kind of financing is the right option.  You can check your credit score on a number of sites, including Equifax and TransUnion.  If your score falls below 660, you’re considered “subprime” and will have a difficult time receiving a loan from a traditional lender.  Now you should start looking at these alternative loan sources.

When you have low or no credit, lending to you is riskier than lending to someone with a good credit rating.  Organizations that specialize in subprime lending need to charge higher interest rates to offset that risk.  If you need a vehicle, this might be your only option.

It seems like a bad thing, but if you can secure one of these loans and successfully make your payments every month, your credit will improve.  Proving that you can be responsible for paying off your debts is a large factor in determining your credit score.

Shopping around for a lender is a good idea.  Every lender in Hamilton has different criteria for determining how much risk someone represents, so it won’t hurt to see what’s out there.  You can apply for pre-approval online in most cases now and applying to a few places in close succession won’t hurt your credit score dramatically.

Bad credit doesn’t have to mean a bad experience!  There are great options for one stop shopping, like at Northway Ford.  You can get pre-approved for financing and browse the selection of cars in your price range on one site.

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