If you’re car lease application keeps getting denied even in some bad credit car loan companies, there may be a little more to the story. If you think that bank loans and credit cards are the only things that can tarnish your otherwise squeaky clean credit score, then you have another thing coming.
Little Things That Matter
When you talk about defaults, people automatically assume things like missed payments with rent-to-own cars or unpaid home loans. You may not realise it at first, but if you miss a phone bill, that actually counts as a default. The same goes for Internet service bills, electricity bills, and water bills. The truth is, the little things in your daily life can make an impact in your record as well.
The trouble with this is that utility and service providers can be a bit trigger happy in handing people defaults. While there are true blue serious reasons why people miss payments, like a death or sickness in the family, or divorce, sometimes the reasons aren’t quite as grave. At times, it’s an unfortunate instance like you’ve moved to a different address and your utility or telecommunications company can’t reach you. Either way, you’d still have to take the hit for it.
The moment that you hit 60 days of being late with a payment, creditors reserve the right to lodge a default notice on your credit file. In which case, you’ve (probably) had your services interrupted and your record tarnished. Of course, the impact is practically microscopic compared to the big time loans. However, even after settling these defaults, that little blemish on your credit file won’t be removed. Thankfully, some lending institutions see these tiny defaults – so long as they’re one-time events – as negligible.
Defaults You’re Familiar With
The defaults that you’ve heard of in the family are probably the ones that sink people into thousands of dollars in debt. As you’ve read in the previous section, you know this isn’t always the case. But there is some truth in this line of thinking. While your service and utility bill defaults are small fry, there are bigger fish in that spectrum that can make acquiring a vehicle a whole lot more difficult.
If you know people who have outstanding student loans from uni, then you’ve probably seen them having a rougher time than most. This is because the big defaults like outstanding student loans, outstanding home loans, unpaid loans to financiers and other institutions, and unpaid bank loans are the defaults that impact your credit file the most.
If a lender finds on one of these defaults in your file, the tendency is to see it as a red flag which leads a lot of reservations whether or not to lend to you. Most institutions would prefer if you’ve settled all of these loans before they even consider giving you a green light for a car loan.
The Heavy Stuff
Unpaid debts can sometimes lead to court writs and judgements. If you weren’t able to file a defence or your defence was unsuccessful, a judgement debt will be ordered, issued, and enforced. This means that you’re going to have to pay the creditor the debt amount, plus interest, plus your legal costs. Ouch.
This is the point where you might start to panic and think that no one will ever lend to you again. Thankfully, that’s not the case. As long as your payments have been settled, or the proceedings related to debt are incomplete, pending, or insubstantial in nature, some financing companies may still lend to you or overlook your legal history. Of course, this is with the premise that you have proper documentation to back up these claims.
Can I Still Get Car Finance?
The simplest answer is yes, you can get car financing even with bad credit.The key is knowing your credit history to a “T” and having the proper paperwork to back up your claims. This is all just to show that you have what it takes to handle your car payments. Remember that not everybody will say yes. Don’t get discouraged. There are creditors out there who will give you second chance car finance.