500 Credit Score Car Loans: Yes, You Can Still Get Approved

500 Credit Score Car Loans: Yes, You Can Still Get Approved

Posted on May 3, 2022

The average credit score in Canada is 650, so if you need a 500 credit score car loan in Brantford, there are some challenges that you will need to overcome before you can get behind the wheel.

Having a credit score of 500 is something you need to take seriously, or you could find yourself in a world of financial hurt as our Brantford auto loans team explains.

Understanding the cause of your low credit score

To fix your credit score, you need to first understand what is causing the issues in the first place.

Start the process by signing up with services like Credit Karma. It is completely free and will give you direct real-time access to your credit score.

The majority of us do not know how credit works until we start having problems. After you have access to your credit report, look for any accounts that are in collections.

With a credit score of 500, the odds of having an accounts that are in collections are better than average.

If you have accounts that are in collections, no new lender is going to approve a new car loan in Brantford. So, you need to pay off those collections right away.

Once you have settled your unpaid collections, you should prioritize reducing the total amount of debt you are carrying.

Suppose your debt is more than 30% of your available credit. In that case, your credit utilization rate is going to bring down your credit score.

An added benefit of paying down your debt is you will save money on interest.

Stretching every dollar in your budget

You need to take a look at your budget and figure out where you can find savings.

Inflation has driven up the costs of everything, but you still need to have a budget in place to reflect this new reality.

The median car loan in Canada is around $500, but that is not an all-inclusive amount.

You also need to factor in the costs of running the car, which is something most people overlook when first buying a car.

Where to find a 500 Credit Score Car Loan in Brantford

There are lenders who provide car loans; even if you have a 500 credit score, most main street lenders will not be able to help you.

In addition, you will not be able to find lenders online, so what you should do is contact a local car dealership.

The dealership will take a detailed look at your finances and credit; based on the dealership's assessment, they will identify which lenders are going to have the most competitive terms.

While reviewing these offers, you should take a few different vehicles for a test drive to determine which one is best for your needs and budget.

The dealership will also give you some tips on how to fix your credit, so you will be able to access the most competitive interest rates in the future.

The sooner you reach out to the dealership, the faster you can start living your best life, but the onus is on you to reach out to the dealership and get the ball rolling.

We’d love to help you find a well priced 500 credit score car loan in Brantford. Simply fill in the form below and we’ll get back to you ASAP! 

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