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Re-estalishing your credit
If you are one of the many who have experienced bankruptcy or have "Dented" credit and need a second chance then this article written by Ken Jakubowsky, Business Manager, Park City Toyota is a must read. Ken shows you one way to re-establish your credit through the purchase of a vehicle.
This is one method that will help you establish enough credit to show mortgage lenders that you know how to handle credit responsibly. You will also need to use other methods such as "Secured" Credit cards as well as maintaining records of prompt payment of your rent and utility bills
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We
will work with our lenders to find a competitive loan for you. Lending
terms, vehicle requirements and program information can vary depending on
the lender and your credit profile, but is it possible to own a newer
vehicle and rebuild your credit.
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If you are
looking to re-establish your blemished credit after a bankruptcy, one of
the best ways is to purchase a vehicle through a dealership. ParkCity
Toyota has relationships with many lenders that specialize in sub-prime
financing. Sub-prime
financing or non-prime, secondary finance or special finance have all the
same meaning; a person who has had credit problems or is credit
challenged. We refer to these customers as a “Second Chance
Finance” customer, and truly believe we can help you.
All of the lenders (banks, finance companies) we deal with report
to the credit bureaus, and can help you re-establish your credit.
We’ll do our best to offer you a great auto loan. You’ll always
receive our professional customer service, regardless of your credit.
General
Vehicle Requirements: We will help you find the right vehicle to qualify!
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- Vehicle
must be five years old or newer.
- Odometer
reading must not exceed maximum mileage.
- Vehicle
must meet certain Loan-to-Value (LTV) ratios depending on the specific
lenders approval. This is a ratio that compares the amount financed to
the value of the vehicle and is usually stated as a percent
i.e. 125%.
- Vehicles
not available for financing are commercial vehicles and insurance
write-offs.
- Depending
on the specific lenders approval, some additional mileage or vehicle
make/model restrictions may apply.
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General
Loan requirements: We know all the In’s and Out’s!
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- Term
must be between 12 and 72 months.
- Late
fees may be assessed on payments received after the due date.
- The
amount financed may include any tax, title, license, registration or
lien filing fees.
- Minimum
loan amount is $5000.00.
- Rates,
Term, Interest rate and qualifications will vary for each lender.
Your loan’s
applicable annual percentage rate and terms can be locked in for up to 45
days, giving you time to decide on the perfect vehicle for you. Interest
charges on your loan will be charged using the Simple Interest Method.
The Simple Interest Method is a way of allocating monthly loan
payments between interest and principal. The amount of your payment
allocated to interest is calculated based on your unpaid principal
balance, the interest rate on your loan, and the number of days since your
last payment. Payments are
monthly, and you specify the monthly due date for your payments.
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Tips For Sub-prime Borrowers
Making the Best of Blemished Credit
You’ve just learned that your request for a car loan with your
bank has been denied. The loan officer explains that the decision has to do with
your credit score. Your bank only
lends to prime borrowers, so your credit score places you in sub-prime
territory.
Sub-prime. You’re not sure exactly what it means, but it sounds like a
condemnation that will forever brand you as being somehow deficient to lenders.
However, being deemed sub-prime doesn’t necessarily mean that your borrowing
days are over. It is possible for you to get that sought-after car loan and
re-establish your credit.
But first you need to understand the term that defines you. A sub-prime borrower
is one with blemished credit. Each lender has its own definition of what
constitutes a sub-prime borrower, but typically, a credit score of less than 620
lands you in this category.
There are plenty of credit grantors specializing in sub-prime
lending who are eager and willing to loan money to those with spotty credit
histories.
So, now that you understand what your playing field looks like, how
can you finesse the game in a way that gets you a reasonably priced car loan?
Here are a few tips:
Check your credit report.
Make sure that everything on your report is accurate; it could be that
information has been entered in error, and that your credit history is a lot
less blemished than you’ve been led to believe. If you do find information on
your report that is inaccurate, you need to address it right away. Contact the
credit bureaus in writing, listing your name and address and clearly detailing
the nature of the error.
Access your credit score.
For a long time, credit scores were available only to prospective lenders, who
used them to evaluate those seeking loans. That has changed; it’s now possible
for consumers to access this all-important number. Your score is available
on-line from the credit bureaus. Knowing your credit score will help give you a
sense of exactly where you stand in your search for a loan.
Remember that your credit score
is malleable and ever-changing. When it comes to
your credit history, the ball is entirely in your court. You can improve your
standing by paying your bills on time, and not overextending yourself when it
comes to loans and credit cards. With proper attention to your credit, you could
conceivably hoist yourself out of sub-prime territory in as few as two or three
years. Going forward, check your credit score at least once annually. You may
have to pay more than you’d like for the loan you’re about to receive, but
in a couple of years, if your credit score has improved, you’ll probably be
able to refinance your loan.
For more
information on how you can re-establish your credit by purchasing a vehicle from
ParkCity Toyota, please contact:
ParkCity Toyota
Ken Jakubowsky / Finance Manager
1276-Trans Canada Way SE
Medicine Hat, AB T1B 1J5
403-526-6228
businessoffice@parkcity.toyota.ca
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