Getting an Auto Loan with Bad Credit is Easier Than You Think

For most Americans, a car or truck is vital to everyday life. Having your own transportation empowers you to do exactly the things you need to do, from driving to work and medical appointments, to picking up groceries and getting the kids to and from school. It’s all about independence. It’s about having the freedom to come and go as you please, without having to rely on buses, trains, or rides from others. In short, your own vehicle liberates you from depending on the schedules, or in some cases the kindness, of others.


However, if you no longer have a car or truck, or yours is no longer useable, getting back behind the wheel can seem like a daunting prospect. After all, buying a new vehicle doesn’t come cheap, and most Americans must secure a loan to finance their new purchase. It should be simple enough to do, but it may not be; your ability to get an auto loan that’s within your individual budget and lifestyle depends on your credit score. Countless banks and dealerships will only provide you with the loan you need if you have a credit score that meets their requirements.


At Citi Auto Group, we aren’t one of them. To help you understand how and why we make getting an auto loan so much easier than the rest, let’s explore credit scores, loans, and everything else you need to know.


How a Poor Credit Score Affects You

Credit scores and histories are integral to modern life. Even if you have no idea how they work or what they mean, you no doubt have heard of them, and how important they are.

Personal credit information is collected on individuals by credit bureaus, or credit reporting agencies, who then make that information, in the form of credit reports, available to banks, lenders, and credit card companies. Though the United States is home to several credit bureaus, there are three main ones – Equifax, Experian, and TransUnion. While these aren’t owned or operated by any government agencies, they do have to follow regulations set out by the Fair Credit Reporting Act.


These bureaus get their information from credit card companies, banks, and companies with which you may hold an account, all contributing to your credit report. Everyone has the right to access their personal credit report, and each of these agencies are obligated to provide one free report to you per year. If you have already requested the free ones you’re entitled to, you can pay a nominal fee to get the latest copy.


Credit scores range from between 300 and 850, depending on a number of factors:

  • The timeliness of paying bills
  • Open accounts and the amounts of money owed to each
  • The length of time for which you have borrowed money
  • Types of credit you have in your name (such as mortgages, credit cards etc.)
  • The number of credit applications you make within a short period of time


Keeping control of your finances and knowing exactly how your repayments are measuring up on existing loans and credit cards can be difficult, especially if you have many active accounts. However, taking your eye ‘off the ball’ can leave you with late or missed payments, causing your debits to increase over time. You may end up with a poor credit score without realizing it until you apply for a loan. With a low rating, you’ll likely be unable to secure financing for a new vehicle from a bank or most dealerships because they will see you as a high risk. If you have a history of missed or late payments, they will assume you will do the same to them if they give you a loan.

This can leave you without the money you will need for your car or truck purchase, and, as we’ve already discussed, the majority of Americans depend on personal vehicles for their everyday lives. And countless people use their personal cars or trucks for their livelihood too. Perhaps you make deliveries, run a towing business, or something similar; you might not be able to afford to continue your business for too long without your vehicle, so being able to buy a new one can be critical to your livelihood.


How Do Credit Scores Work?

Credit scores can be difficult to follow, especially if you’re only provided with the number itself, without any relevant details. Credit scores are the numbers developed by the credit bureaus, based on your specific credit history, that place you in a rating category. The lenders use that score to assess how much of a risk you may be as a potential borrower for them to get their funds back. The credit rating system most people are familiar with is likely to be the FICO score, which is a number between 300 and 850; the higher your score, the more reliable the lenders expect you to be. A ranking is typically assigned to the scores, ranging from bad to excellent:


·      Bad – less than 600

  • Poor – 600 to 649
  • Fair/Average – 650 to 699
  • Good – 700 to 749
  • Excellent – 750 and up


Obviously, you’re encouraged to have the highest possible score you can, but that’s much easier said than done, of course. Though credit ratings in general have continued to rise, plenty of us may be struggling to get our credit scores under control.


How can Getting an Auto Loan Help Boost Your Credit Rating?

Believe it or not, getting an auto loan can boost your credit rating and improve your score over time. But how? Let’s say you take out a loan to make some modifications to your home or to buy new furniture; the amount would be determined by the modifications to be done, or the amount and styles of the furniture. You might need a small loan to cover your costs, but you may decide to take a larger amount to cover the possibility of higher unexpected costs, potentially burdening yourself with payments you struggle to make on time. Being late on your payments could result in late charges and an increase in your interest rate, and your debts may mount up more and more over time.


As the costs grow, you’ll find yourself having to measure how your other expenses fit in with this loan; your utility bills, your mortgage or rent, your family dependencies, and more. This can become increasingly stressful, affecting your quality of life, and leaving you with far more money to pay back than you can handle. This isn’t to alarm you, it’s only to illustrate how difficult managing your loan payments can become if you take out an amount that’s too much for your budget and lifestyle. Some lenders may well offer you a bigger loan regardless of how this may affect your personal finances, just so the interest builds, and the payments increase.


Assuming your credit score is not very good, but you’re now in a better financial position than you were, taking out an auto loan can be your chance to show how responsible and punctual you can be with your payments. If you could secure an auto loan that’s tailored to your budget, even with that poor credit history, you should be able to keep up with the payments. The number of payments and the payment amount will vary depending on the amount and length of the loan itself, but you must be sure you can meet the payments in a timely manner.

As you continue to make your payments, you will be able to build your credit rating back up. Eventually, you’ll have a repaid loan to your name, a decent score, and a new credit history showing that you’re no longer a high-risk borrower. This will make you far more eligible for other loans and financing plans in the future, establishing a solid foundation upon which to build in years to come.


Still, it’s not only those with poor scores who may benefit from an auto loan; it can help people with little or no credit history at all. First-time buyers can find themselves struggling to secure a loan, as they have no way to demonstrate their worthiness or reliability. No credit cards and no charge accounts mean that lenders will have no credit history to draw on. In such cases, they will be unwilling to offer you any financial support at all. Finding an auto loan can be as much of a challenge for those with no credit history, but finding a lender willing and able to help you can make all the difference. Once you have the loan, you’ll be able to build your score with regular, timely payments and showcase your ability to stick to deadlines, meet targets, and manage your finances responsibly.


How can Citi Auto Group Help?

At Citi Auto Group, we pride ourselves on providing you with the best possible loans for your current situation. When you come into our dealership, we’ll introduce you to our own in-house financial department. You’ll be able to sit and talk with us about what type of vehicle you need, how much you can afford to pay each month, and more. Once we’re familiar with your expectations and budget, we’ll help you get the perfect vehicle, with a loan that’s right for you. It’s that simple.


Citi Auto Group will help you get behind the wheel of a quality used car or truck that’s ideal for your budget. No matter how much your debts may have increased, or your money-worries mounted, we’ll make securing an auto loan quick, simple, and hassle-free. You may think that getting an auto loan is bound to be a major chore, demanding hours to fill in endless forms and subject yourself to all manner of questioning and cross-examination. This may be the case with some lenders, but not us. Don’t let your low credit rating or lack of a credit history put you off coming to us for your auto needs.


Our expert team has worked with many customers with poor credit scores; people who initially came to us thinking they would probably be turned away, as they have been elsewhere. Banks and other lenders can be notoriously ruthless, taking your personal financial history as a summary of your entire ability to manage your own money. We prefer to give everyone instant approval and place trust in you to make timely payments that fit your budget. This has proven successful for us and our customers, helping so many people get back on the road without hassle, whether for their personal or business needs.


You have a number of options to get started with the application process. You can use the loan calculator on our website, which provides you with a quick, simple way to see how much your monthly payments might be, based on the amount you wish to borrow and the number of years to pay it back. Remember, the longer the term is, the lower your monthly payments will be. Or, you can go right to our application form, which enables you to input the personal and financial information needed for us to evaluate what type of loan would be best for you.


Our financial department is experienced helping customers on all budgets, with all vehicle requirements, and can help you get Instant Approval for the financing you need. We have an extensive inventory of quality used cars and trucks from most of the biggest and best manufacturers, with many options available. To learn more about getting a vehicle that matches your needs, and financing you can afford, please feel free to contact us. You can give us a call at 215-744-6901, or drop by our dealership at 4160 Torresdale Avenue, and talk with us in person. Our staff is looking forward to helping you with your new car purchase.