While weÂ aren’tÂ credit specialists at Car Nation Canada, we do work with one to secure bad credit car loans for our customers. One question we get asked a lot is, if you get turned down for a car loan, will it affect your credit score?
Our credit scores have taken a hammering over the past few years and for the most part, it was nothing to do with us. However, we have to knuckle down and handle the situation as best we can. While we certainlyÂ aren’tÂ credit experts, we have consulted the guys at Experian in order to answer this question.
If you are refused an auto loan, whether itâ€™s a standard loan or a bad credit car loan, it does not show on your credit report. A report shows inquiries and accounts on your report. Those inquiries do not show whether an application was successful or not, just that someone pinged your credit score.
If a new account is opened to handle that auto loan, then the score will reflect the increased debt which will be clear for others to see. ItÂ doesn’tÂ matter whether that new debt is a bad credit car loan, standard car loan or any other type of finance. Your credit score will just reflect the increased debt you have accrued.
If you are refused that loan, a new account will not be opened, which will indicate either the loan was refused or youÂ didn’tÂ go through with it. No inference is made that the loan was refused. There are a multitude of reasons why a loan is not carried through, so no assumptions are made.
One thing to bear in mind if youâ€™re thinking of applying for a bad credit car loan is that once the lender has checked your credit score, that check is noted and represents possible risk. Any further credit checks for an auto loan will see that check and may ask you about it.
If you need credit but have a less than perfect score, our credit partner Carloans4you could help. Contact them to find out more!