Friday, May 30, 2014

How Does Sub-Prime Financing Work?

         Not everyone has had a perfect credit history, and most times it's through no fault of their own. Young consumers don't understand that every financial decision they make since the day they turn eighteen is tracked on their credit reports. Yes, some people make bad decisions, but most people want to pay their bills on time. It just so happens that sometimes, people are forced to choose between two necessities. Others have simply been a victim of circumstance... Divorce, accidents, unexpected medical costs, or loss of a job can affect a consumer's credit rating. Auto finance companies prefer those with "Prime" credit, meaning those who have excellent credit and haven't fallen on hard times and were unable to pay a bill or two on time. Everyone one else outside of that "Prime" category would be considered "Sub-Prime".


         The problem with credit is that it can be a "catch 22". If you have made mistakes in the past or been victim to financial hardship and are now on the right track, how do you prove that you are now able and willing to pay if you can't get financing? If you have are just starting out and have no credit, how can you prove you are credit worthy when no one will give you a loan? This is where the Sub-Prime market can be a benefit to consumers. Sub-prime lending allows auto buyers the help they need to get a vehicle today, and improve their credit while they are trying to improve their financial situation.

         Installment loans are one of the best types of borrowing to improve credit ratings. Paying a car note on time can improve your score tremendously. Bad credit car loans, while not as easy to get, are the best way to improve your credit situation. Some loans may require a higher interest rate, higher down payment or additional income and living situation verification depending on how bad your credit situation is, but can be a valuable stepping stone to getting back on track.

        We want to help. We are experts in financing customers that can't get financed anywhere else. Customers can apply online on our website and receive an answer in minutes. We are here to get you driving again. Apply today! www.usedcarworldpa.com