Don’t Let Your Credit Take A Hit
Lots of dealerships and bad credit car loan companies will submit your credit application to every bank possible at once, hoping to get at least one approval. They will tell you that this process is beneficial to you, and it will increase your chances to get a car loan with bad or no credit.
The truth is, this technique may actually hurt your credit score. If after applying for a car loan you have too many inquiries from various lenders, it will decrease your score which means the next lender will offer an even a higher interest rate than previous one.
Inquiries matter, because it’s the only way for the lenders to see if the customer is actively seeking credit. Typically, customers who are actively looking for credit or have excessively shopped for credit in the last 12 months are classified as having a higher risk level than those who have not. Keep that in mind when shopping around for a bad credit auto loan. Also remember that if you have applied for multiple credit accounts in a short period of time, you may represent a higher credit risk to lenders.
Banks work closely together and are aware of each other’s approval requirements. If a lender with lower standards denies your car loan application, it makes it that much harder for a prime lender to approve it. They may wonder why a lender with less strict guidelines refused to give you a bad credit car loan.
If applying for the same type of loan (for example an auto loan or mortgage), make sure all inquiries are made within 14 days. It’s more likely that those inquiries will count as just one inquiry for a loan.
The impact of too many inquiries to your credit file varies from person to person. However, on average, each additional inquiry will take 5 points off your credit score!
How Are We Different?
- We have strong relationships with all bad credit auto loan lenders and only work with Canada’s top banks that report your auto loan to the credit bureau. Auto loans are viewed as “installment loans”, and it’s the fastest way to increase your credit score (as long as your installment payments are paid on time).
- After receiving your car loan application and consent to pull your credit, we only pull it once to avoid any negative effect on your credit.
- Our Finance Managers review your credit report with our Finance Director. Afterwards, your application gets sent to the lender that we know will get your car loan application approved at a great rate.
- We will NEVER “shop” your credit with every lender out there. If absolutely necessary, we will send it to another lender to get a better rate for your car loan application. This is always done within the same week, so other lenders see it as just one inquiry = no points lost!
Car loans for bad credit may seem overwhelming, but we make it simple with the least risk to you!