Can In-House Financing Impact Your Credit Score?

If you’re a person who’s had credit trouble in the past, you might be leery of trying to get a new car loan. You’ve probably heard a lot of stories about how trying to obtain a loan of any kind can actually hurt your credit score. Lenders often frown when they see multiple hits to a person’s credit report as they attempt to get a new loan or open a new credit account. Multiple hits in a relatively short period can actually bring your credit score down. And when your credit score is already at an all-time low, that’s not good.

in-house car financingThat being said, there are times when a purchase is big enough that a loan is necessary. Many people are not able to save enough money to pay cash for a new or used car. That’s when a car loan comes into the equation.

But here’s the good news.

Getting a car loan doesn’t have to bring you down.

That’s right. Applying for a car loan doesn’t have to pull your credit score down lower. The trick here is to apply for in-house financing from a bad credit car dealership (sometimes called a buy here pay here dealership) like AutoMax.

Who is AutoMax?

AutoMax is one of the most popular bad credit car lots in North Carolina. They’re happy to work with people who have had hiccups in their credit history. In fact, they’ve built their business by helping people with bad credit get into a “new” used car that’s reliable and affordable. AutoMax was started by two brothers who had a passion for selling reliable pre-owned vehicles to people with bad credit or no credit. The ability to finance these cars in-house is what sets AutoMax apart from the competition.

The second generation of the family now runs the business. They’ve been serving the North Carolina market - including the cities of Henderson, Youngsville, Raleigh, and Durham - for 30 years now, and they still approach every customer with the same integrity and willingness to help that drove the business from the beginning.

It’s all about building relationships.

That’s great, but how does all this impact my credit score?

We’re getting to that. Here are a couple things you should know before applying for in-house financing from a bad credit car dealership like AutoMax.

Making regular monthly payments on time may help rebuild your good credit.

Pretty simple, right?

Bad credit car lots have the ability to carry the financing on the loans they make. This gives them more flexibility in the interest rate and terms of the loan when working with someone who has bad credit. A buy here pay here dealer like AutoMax gets to know you personally and “banks” on your future earnings and repayment potential. They’re not interested in what happened in the past. Their goal is to get you into a car that you can afford and help you create a better future, and they do that through the use of in-house financing.

At a buy here pay here car dealership, the discussion around financing usually comes first in the car-buying process instead of at the end, as you would find with traditional car dealerships. By putting this talk up front, the financing folks can determine how much car you can afford based on your monthly income and other obligations. They can then steer you to appropriate choices when it’s time to take a look at the inventory and go for a test drive. It’s to their benefit - and to yours, too - to help you get into a vehicle you can afford because they know you’ll be able to keep up with the monthly payments easily.

That’s what makes the biggest difference. Regular monthly payments may help rebuild your credit score.

AutoMax, along with a few other bad credit car dealerships, reports your timely payments to one or more of the top three consumer credit reporting agencies: Equifax, TransUnion, or Experian. This shows the credit bureaus that you’re working to rebuild your credit status. The more on-time payments reported, the better you look to a potential lender in the future. With enough good payment history behind you, your credit score will start to go up, and soon you’ll be able to apply for traditional loans again should you ever have the need.

Making payments is convenient and easy.

Buy here pay here dealerships usually make it convenient and easy to make payments on time. At AutoMax, there are multiple methods for getting it done.

  1. In person at the dealership - they always like to say hi to their customers
  2. IVR (phone)
  3. Snail mail
  4. Text Pay
  5. Online payment portal
  6. Automatic debit card payment
  7. Automatic withdrawal from checking account (ACH)
  8. Call in

Setting up payments that pull automatically is a great way to make sure your payment is always on time. ACH or automatic debit card payments hold you to the payment schedule, making your payment history look terrific when a bad credit car dealership reports your payments to the credit agencies. It makes a lot of sense to set this up as soon as possible if you can.

So can in-house financing impact your credit score?

The answer is YES! In-house financing can definitely impact your credit score - in a good way. Purchasing a used car at a bad credit car lot like AutoMax not only puts you in safe, reliable transportation, but it also gives you a method by which to start rebuilding your future. And that’s priceless.

If you still have questions about how in-house financing works or how it can impact your own credit score, give AutoMax a call today. They’ve helped hundreds of customers in North Carolina, and they’ll be happy to help you, too!

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