The three most commonly believed myths about bad credit can deter someone from attempting to finance big purchases, such as buying a car. By understanding the truths behind these bad credit myths, you can feel more confident shopping for your next new vehicle.
Bad Credit vs. No Credit
The first common myth about bad credit is that having a negative credit history and having a limited credit history are the same. No credit differs from bad credit in that it indicates a lack of credit history. Credit history, whether positive or negative, is created in a few key ways. Regular monthly payments on loans, credit cards, and other bills that report to credit bureaus build a credit history. Missing payments frequently and defaulting creates a negative credit history.
The solution to no credit and a poor credit rating are essentially the same. Begin making regular payments. Instead of allowing your credit to stop you from purchasing the car you need, look into financing options that are suited for your credit worthiness, such as in-house financing directly with the dealership. The payments you make toward your car will have a positive impact on your credit history.
Purchasing a Car
Many people believe that if they have bad credit they will be unable to purchase a car due to financing restrictions. The truth of this popular myth is that there are options available to you if you have bad credit or no credit and need to get financing for the purchase of a vehicle.
In-house financing done directly with the dealership you are buying the car from often has less strict credit worthiness requirements and are geared towards first time buyers and those with bad credit histories. If you have been getting approval through other outside lenders in the past, exploring in-house financing with a dealership can it possible for you to drive off of the lot in the car you need.
Everyone but Me Has Good Credit
When you realize you have bad credit, it can feel like you are the only one with that problem. Actually, poor credit or limited credit histories are extremely common issues many people will face at one point or another. This alienating myth can make you hesitant to purse available options or apply for financing for fear of rejection. The truth is, there are a lot of people in nearly identical credit situations and lenders are aware of that, which is why credit building financing options can be found.
Do not let the common myths about bad credit stop you from shopping around for a car. Understand the realities behind these myths in order to start rebuilding a positive credit history.
*Image courtesy of freedigitalphotos.net
