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Big Bad Credit Auto Financing Myths You Need to Forget

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You need a car loan but you know very well how your credit looks like. A lot of people are anxious about applying for a car loan because they believe so many things about having bad credit that aren’t really true. Dispel those myths now here at Houston Auto Approval Center and get approved for a car loan later.

It’s impossible to get an auto loan with bad credit.”

Are you one of the many bad-credit holders who think that getting an auto loan is impossible with bad credit? It’s time to let go of that thought and start believing that there are auto loans for people with less-than-perfect credit!

It’s true that lenders look at the credit history, which greatly affects the loan decision, when evaluating your auto loan application. But just because you have bad credit doesn’t mean you’ll never get approved. There are a lot of lenders today that are open to credit-challenged borrowers.

Find an auto lender here in Houston that specializes in bad credit financing. It will also help to improve your credit first before applying for a car loan.

The credit score is the only basis for approval.”

The credit score plays a major role in your auto loan application as it indicates your overall credit standing and serves as risk meter to lenders. But it isn’t just the determining factor for a loan decision. There are several others including your employment status, income, payments history, and the vehicle you want to finance.

Again, the credit score is just one of the factors lenders look at. They don’t entirely base their decision on it.

Having bad credit is the same as having no credit.”

Bad credit and no credit are not the same. They may both pose risk to lenders but they are not exactly alike. Having bad credit is having an established credit history that’s been marred with negative information like bankruptcy and default. No credit, on the other hand, means you haven’t established any credit yet. Although both credit situations are risky for lenders, lenders can let go of them when you have stable and sufficient income and a cosigner.

Car loans would only cause more damage to my credit.”

It’s true that bad credit car loans carry higher interest rates. And that could actually cause more damage to your credit if you’re not careful to take the lowest possible rate and pay on time.

At the flip side, bad credit car loans are opportunities to improve your credit. By just paying your monthly dues consistently on time, your credit score can earn some points in months.

All bad credit car loans are scams.”

As mentioned, bad credit car loans carry higher interest rates. And a lot of lenders abuse them, making people think that all auto loans for people with bad credit are rip-offs. This isn’t true. There are still several legitimate and reputable lenders, including banks and credit unions, that offer car financing for bad-credit holders. Find them in Houston and compare their offers with each other. It will also help to be familiar with the schemes of fraudulent and unscrupulous lenders and other entities lurking in the market.

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