![]() ![]() In some cases, a car repo may be considered situational bad credit if a financial hardship caused the repossession and you had good credit up to that event.Ī good way to bounce back after a repo is by paying everything on time, all the time. Subprime lenders often work with borrowers in tough credit circumstances, such as an old repossession. As we mentioned, after 12 months, some lenders may be willing to work with you if you prove your ability to repay a loan and have maintained your credit score in the meantime. That feels like a long time, however, they lose some of their potency with each passing year. Vehicle repossession can remain on your credit reports for up to seven years. Most auto loans are simple interest, meaning the faster you pay off your car loan, the less interest accrues during the life of the loan. To lessen your interest charges, we recommend putting a large down payment on the vehicle and choosing a short loan term to pay down the loan quickly. Think of this as the trade-off for skipping the credit check. Since many of these dealerships skip pulling your credit, they tend to charge more for borrowing. If you’re able to qualify for a loan from a BHPH dealer, expect a higher than average interest rate. Proof of residency, proven with a recent utility bill in your name.Proof of identity and/or valid driver’s license.Proof of income, typically computer-generated check stubs.A down payment, possibly up to 20% of the vehicle’s selling price.To get an auto loan through a BHPH dealer, you may need: For many of these dealerships, your proof of income, down payment size, and proof of identity are the most important parts of your eligibility. Without a credit pull, your recent repossession doesn’t impact your eligibility. While used cars may be your only option, these dealers often skip over the credit check. These are typically independent dealers that are limited to selling used vehicles. As the name suggests, you apply for financing at the dealership and the dealer is the lender. ![]() In-House Vehicle FinancingīHPH dealerships have in-house financing. If your credit score is poor now and it’s been less than a year since the repossession, a buy here pay here (BHPH) dealership may be what you need. There’s no hard and fast rule on what credit score you need across all lenders, but that’s a good rule of thumb. Most traditional auto lenders such as banks and credit unions have high credit score requirements, and typically require borrowers to have a credit score over 670. If it’s been a year since the vehicle was repo’d and you need a car loan, then your credit score could be the stopping factor. If you apply for an auto loan with a traditional lender a few months after the repo, unfortunately, you’re not likely to qualify. ![]() Most traditional and subprime lenders don’t accept borrowers with a repossession that’s less than 12 months old. How long until I can buy a car after a repo? Vehicle repossessions can hurt your credit score and make it hard to be eligible for an auto loan. Here’s an option you may have for buying a car right after a repossession. Within one year after a repo, qualifying for an auto loan can be tough. ![]() There’s nothing stopping you from buying a vehicle with cash immediately after a repossession – but financing can be another story. ![]()
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