Having a bad credit rating can make life much more difficult and frustrating. There are plenty of good people that have gotten into unfortunate situations that have caused their financial situation to be of high risk to lenders. In most cases buy here pay here car lots structure their payments either weekly or bi-weekly depending on how you get paid. So another advantage is making much smaller payments. This will keep you from having to come up with a large payment once a month, and for some it is easier to manage. For people who have a low credit score or have encountered some serious delinquency in the past and are in need of transportation turning to a reputable buy here pay here dealership can repair their credit.
There are two mainstay methods of repairing your credit. Revolving credit and significant installment loans. A credit card would be considered a revolving debt. There are many companies that will provide secured credit cards to consumers with slow pay histories. A secured card is used to build good credit history by making timely repayments. It is “secured” by a savings account or deposit that holds sufficient funds to pay off the card balance. Essentially you are borrowing from yourself but this process is effective in starting the credit rebuilding process. Large installment loans include automobile and home loans. Although most mortgage lenders are more discriminating about problematic credit history, a buy here pay here dealer can grant you the installment loan that is necessary to the rebuilding process. If you make your payments on the day they are due, and your dealer reports your payments to the credit bureaus, then your new vehicle can be a high horsepower way to rebuild your credit.
While there are many advantages there are always disadvantages and one disadvantage is paying higher interest rates. Until your credit improves you will have to pay higher interest rates for anything that you would finance. The buy here pay here lot is no exception, but it is something that you will have to deal with if you need a car and can’t afford to pay for it in full. The main idea is to help you out with a car loan while you start building your credit to the point that you can qualify for traditional auto loans. One tip to keep in mind is that the interest rate does not have to last the life of the loan because after months of on time payments you can likely refinance at a lower rate with a bank that may have told you “no” before you proved your ability to make timely payments.