Getting a credit check done is a scary concept for a lot of Canadians. You might have gone through bankruptcy in the past, have had repossessions, been sent to a collections agency, made late payments, recently gone through a divorce that didn’t leave you in the best place financially, you might have a lack of a credit history in Canada or maybe fear what making an inquiry into your credit will do to the actual score. These are all common reasons for people to seek out financing options that will waive the credit check aspect that most financing agencies now a days require.
Is it possible?
While there are a few financing agencies who might approve you without doing any credit check, I am here to tell you it’s probably not the best idea. Financing through one of these few agencies might actually leave you in a worse place financially than you were before. The interest rate that you would have to pay would be higher than the worst case scenario of what would come out from actually checking into your credit.
“I am scared that making an inquiry into my credit will hurt my credit score”
This is a common misconception amongst Canadians today. Making a single inquiry into your credit will not hurt your credit score at all. Your credit score will only start to see itself be affected if you make more than 5 inquiries into your credit within 2 weeks. As a matter of fact, if financial advisers are able to see your credit, they can fight with lenders for lower interest rates on your behalf. It is in their best interest to get you the best interest rates available.
“I don’t want to answer dozens of personal questions, and have to speak about my past issues”
The great thing about getting Auto Financing today, is that there are a lot of lenders who don’t need to ask those questions. The deepest they will go into personal questions will be asking you if you are employed, what your monthly income is, and whether you rent or own the space where you live. You won’t have to answer any embarrassing questions.
To speak with a financial adviser about the options available to you, please fill out this short application form.
“What if the interest rate presented is too high?”
Say the interest rate presented isn’t what you were expecting. It’s a little higher than what you feel comfortable with. I can almost guarantee that this interest will not be as high as attempting to find someone who will finance you without a credit check being done.
“How long do I need to make car payments at the higher interest rate?”
The best thing you can do is to look into a short term financing deal. The way that short term financing deals work is pretty simple. You finance at your current interest rate, make payments on time for the entire duration of the term and by the end of that term your interest rate might be reduced by up to 50% less than what you originally financed for.
To learn more about financing with bad credit check out our 5 Tips for Auto Financing with Bad Credit.
Building Your Credit
Here is the good news. Regardless of where your credit is currently at there are always ways of improving it. The most common ways of building your credit are:
- Obtaining unsecured credit card
- Obtaining a secured credit card (if you are unable to get an unsecured one)
- Get a mobile phone on a post-paid plan
- Pay off outstanding balances in full each month
While all of the mentioned above have an impact on your credit score and building your credit, the most efficient way to build credit in the least amount of time possible is by getting an Auto Loan.
Having an auto loan and making your payments on time, is a good measurement of responsible credit usage. It can also be used as a good tool to prove your ability to pay larger debts which could help you in the future to apply for larger loans.
To get a free quote with no obligation on financing a newer Car, Truck or SUV, fill out an application here. Our financial specialist will give you a call back within 24 hours and answer any questions you might have.
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