THE CREDIT REBUILD PROGRAM at ORANGEVILLE AUTO PARK
What is Credit anyway?
Your 'credit' or 'credit report' is actually just a detailed record of all of the times that 'loans' have been made to you. Remember that the term 'loan' doesn't just mean a cash loan. It also includes mobile phone contracts, credit cards, student loans, mortgages, lines of credit and bank account overdrafts.
Your credit report serves as a way of letting other lenders know whether lending money to you should be considered risky or not. Essentially, lenders are using your past behaviour to determine how you'll behave in the future. Your risk level then determines the interest rate the lender is willing to offer you. Low risk equals a low interest rate. High risk equals a high interest rate.
Credit is considered damaged when a credit report shows missed payments, late payments, accounts that have been written off or sent to collection agencies. It also includes credit reports showing past bankruptcies or consumer proposals.
This type of damage can be the result of a number of unfortunate life events including loss of a job, divorce, disability, the closure of a small business and many other negative circumstances.
Damaged credit affects so many aspects of one's life, from being denied auto loans and mortgages to being turned down for apartment rentals and even job applications.
The good news is that damaged credit can be rebuilt. But how?
Rebuilding Damaged Credit
In order to rebuild damaged credit, you need to take action. Time does not fix credit therefore doing nothing will not improve your credit score.
You cannot erase missed or late payments from your credit report so the only way to rebuild it is through GOOD credit. Good credit overshadows the damaged credit and shows future lenders that you now are able to effectively handle your financial obligations.
Why a Car Loan?
Car Loans are an excellent way to prove to lenders that you are willing and able to commit to your financial responsibilities. Typically paid every two weeks, there are 26 car payments over the course of a year. This means 26 opportunities to show future lenders that you are able to make your payments on-time.
Car loan payments are also typically much higher than credit card payments therefore they carry a lot more weight.
For example, a credit card with a $500 balance requires a monthly payment of less than $20. A monthly car payment, however, typically varies from $200 to $400 which is 15 times greater. This larger payment is therefore that much more effective in rebuilding credit.
The Rebuilding Process
Step 1: First, we pull together your basic information such as your address, your job and your monthly earnings.
Step 2: We take your profile and present it to a selection of different auto lenders, many of whom specialize in lending to individuals with damaged credit.
Step 3: These lenders then pre-approve you for a car loan, often within 20 minutes of receiving the application. The pre-approval will state the terms of the loan, including the maximum amount they are willing to lend, the acceptable makes, models, mileage and years of the approved vehicles and any down payment or documentation required.
Step 4: We help you find the vehicle(s) that fit the pre-approval given by the lender. Assuming we find a vehicle you like, you can be in your new vehicle within 1-2 days.
How Does My Credit Improve?
Once you are in your new auto loan, making regular on-time payments is key. These payments will be reported to the Credit Agency and will show on your credit report. These payments demonstrate your new ability to effectively manage your finances. They show that you are no longer a "risky" customer.
After approximately 12 months of on-time payments (combined with no other negative items on your credit report during this period) your risk profile will have reduced significantly. This means that you will likely qualify for a much lower interest rate, often half of what your current rate is. Yes, reduced by half, after only 12 months.
At this time, we can help you secure a new loan at a lower interest rate. We help you trade in your vehicle and pay out the existing loan. Your new loan payments will continue to improve your credit and you will keep seeing increases to your credit score.
Our goal is to get everyone back to a PRIME CREDIT SCORE. We have already helped so many people achieve this dream and we can help you too.
As a first step, contact us at (519) 215-8846 so we can talk you through your credit report and your options moving forward. We look forward to hearing from you!