Automobile Financing Made Easy with Consumer Portfolio Services

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March 8, 2020

Owning a vehicle is no longer considered a luxury for the wealthy. People from all walks of life need access to a reliable car to get them to and from work. However, not everyone has a picture-perfect credit rating. Consumer Portfolio Services helps all individuals get automobile financing, even those with poor credit history.

The Importance of a Credit Rating

In the United States, all consumers have a credit rating between 300-850. The higher a person’s score, the more likely they are to qualify for loans. Not everyone has good credit, and this may pose a problem if they ever decide to finance a vehicle.

This coveted score gives lenders a brief glimpse into a person’s credit history. Previous and current lenders provide credit bureaus reports to show whether or not the borrower is reliable. A credit rating is an accumulation of payment history, debt to credit ratio, and length of credit. Lenders view those with higher scores to be less risky.

Car Buying and Poor Credit

As previously stated, some consumers have poor credit scores. Nearly one-third of Americans have ratings between 350-669, which lenders consider to be high-risk. When buying a vehicle, this number may prevent someone from being able to finance a dependable car or truck.

When a person has poor or no credit, lenders are hesitant to let them borrow money. Even those who earn below the poverty line may find themselves out of luck. These purchasers often need to look beyond traditional dealerships to find a company willing to provide them with a loan.

Indirect Automobile Financing

While most dealerships work in conjunction with major banks to offer customers finance solutions, these options may not be viable for someone with bad credit. Instead, they should seek indirect automobile financing from a specialty lender. These lenders frequently work with consumers who have low incomes or below-average credit scores.

Instead of offering new vehicles, most indirect lenders secure contracts from dealerships for late model automobiles. These vehicles have a lower retail value, which makes them ideal for buyers who are on a budget. The financing company will work with the borrower to come up with an acceptable payment plan. Those with low credit may be able to purchase a car after all.

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