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Auto Financing For 4 Troubled Credit Situations  

Auto financing can be a daunting task, especially for those going through difficult financial situations. Life doesn't always go according to plan, and sometimes people find themselves in troubling credit situations. Here are four common situations, and why it's not a problem to get auto loan financing with poor credit at Westborn Chrysler Jeep Dodge RAM.



Collections

Collections appear on your credit if too many payments are made late or skipped. This can lead to lower credit scores and difficulty obtaining credit with favorable interest rates and terms.

Late payments, especially recent ones, can significantly impact your credit score. Collection accounts are considered seriously delinquent and can really harm your credit report. Getting approved for a car loan can be challenging if you have outstanding collections on your credit report. The good news is that, even if you find yourself in collections, Westborn Chrysler can help secure financing for your new vehicle. We have loan options specifically designed for people with less-than-perfect credit to easily approve everyone. Get started now with our online car finance application and let's find the options that work best for your particular situation.


Bankruptcy

If you file for bankruptcy, you can expect your credit score to drop, unless it is already low. The impact of bankruptcy on your credit score will depend on the type of bankruptcy you file, as well as factors such as the amount of debt discharged and the ratio of positive to negative accounts on your credit report. 


Someone with an average credit score of 680 will typically see their score fall 130-150 points after filing for bankruptcy. On the other hand, someone with a higher score of 780 could lose 200-240 points. The drop in one's score can make obtaining loans or unsecured credit difficult or near impossible, as you would be considered a high-risk borrower. However, for those with already low credit scores (around 400-500,) filing for bankruptcy could boost the score up to 50 points. 


There are two main types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves the discharge of most unsecured debts, meaning creditors cannot recover the money they have advanced. In contrast, Chapter 13 bankruptcy consists of creating a repayment plan to repay creditors partially over a fixed number of years. A Chapter 7 bankruptcy will remain on your record for ten years, while a Chapter 13 bankruptcy will remain on your record for seven years after receiving a discharge or dismissal.


If you find your situation improves with a Bankruptcy filing, have no fear that you will be without transportation. Westborn Chrysler's finance options include programs for this situation and we will help you secure auto financing and get you driving as soon as possible. 


Medical Debt

Hospital and doctor bills can potentially affect your credit if they are not paid on time, as your healthcare provider may turn the account over to a collection agency that reports to the credit bureaus. Using a credit card to pay for medical bills can impact your credit if you skip payments or can't make the payments on time. Plus, this type of debt could increase your credit utilization ratio. In most cases, medical bills will only appear on your credit reports if they are turned over to collections.



Bad or No Credit

Those who don't have a credit history are known as "credit invisible." This is typically due to the lack of credit accounts or the result of not using credit for a long period of time, resulting in the removal of information from their credit history. With no credit history, there is nothing that can be used to calculate a credit score. This is common among young people who haven't yet applied for or obtained any loans or credit, but it can also affect older individuals who have never had credit in their own names.


It typically takes a first-time buyer several weeks to establish a credit score. When you open your first loan or credit card account, the lender will report it to the national credit bureaus, and after a few more weeks, you will have credit reports at each bureau. However, an account needs to be open at least six months and have at least one paymet reported in order to generate your FICO Score. So it may take several months to establish a credit score. 


That's why Westborn Chrysler looks at the situation and not just the credit report alone. It takes only 2 minutes to complete our full credit application and we'll call you right back to discuss your credit approval. We work with people who need to establish or re-establish a credit history and have awesome programs to get you approved and on the road quickly.


Why is Westborn Chrysler Jeep Dodge RAM is the best Auto Loan Financing resource for people with troubled credit situations near Dearborn, Michigan? Because we take the time to understand your unique financial situation. Our team of financing experts has decades of experience helping people with all types of credit history find affordable financing that works for them. The strong relationships we have with banks and lenders allows us to secure financing options that may not be available to individuals on their own. We offer a wide range of options, including traditional loans, leases and even specialized programs for people with no credit or bad credit. Browse our quality selection of affordable, reliable vehicles from many makes and models today and we'll help you get the best approval options available.