Bad credit car finance loans, and improving your credit

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Bad credit car finance loans, and improving your credit

17th August 2010

There are two major expenses that consumer have that relate to housing, and commuting. These are of course the loans involved in mortgages, and purchasing cars. Most people will at some point require these kinds of loans, as they will require to live somewhere, and to commute from their workplace, their leisure activities, or their place of study.

A lot of people these days are not able to purchase their houses, or their cars, for cash taken straight out of the bank. Very few people have hundreds of thousands of pounds to just lay down, and so this is where mortgages come in handy for people.

Due to the recent economic downturn, foreclosure of houses has become a problem for many families, as well as the record unemployment rate that seems to be affecting everybody the world over. People are now in a fragile position in terms of mortgages, work, and indeed their credit rating.

This bad credit rating that a lot of people may now have will also dramatically effect the people who want to purchase a car, but using car finance methods.

One of the simplest ways that a customer with a bed credit score, to improve their credit score, is to secure car loans with banks or finance firms that ultimately reports any credit to the major credit bureaus. This is beneficial for many reasons, and provides an effective service for people with bad credit for these reasons too. First of all, car purchases are the second largest purchase that somebody will make in their life time.

This obviously falls second to buying a house, and this shows that the customer has an ability to apply for this kind of financing.

Moreover, the car loan payments become recurring in nature. A fixed and agreed amount will be paid from then on, until the overall payment has been completed. Therefore, if the payment is paid on time, consistently, it will demonstrate that the customer will have a favorable payment history.

These two things can obviously mean that, amidst buying a car with a bad credit score, you are also taking active steps towards fixing your credit score, however bad you might think it is.

There are several finance firms from which people with bad credit scores, and good credit scores alike, can secure a car loan. It doesn’t have to be as distant as you might think it is. These finance firms will exist because financial institutions, and traditional banks, will not cooperate or offer services in the market of people with bad credit scores.

Finance forms often work within a particular network of independent dealerships of cars, and will be found by simply walking into these car dealerships. If you ask if finance is available for car loans with bad credit, you will no doubt be rejected by these traditional banking and financial institutions.

Some other finance firms can easily be found through their online presence. These firms who are based online, can easily pre-approve a car loan based on the kind of car you choose. This will depend on the make, mode, and indeed the number of miles that the car already has on its clock .The car you intend to purchase could mean that you will already be able to have a loan approved with a firm which is willing to work with people with bad credit.


Posted in Car finance

 
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