It can be difficult for people who have bad credit to increase their credit rating. If you have bad credit it is harder for you to obtain a credit card, which in turn can make it difficult for your score to increase – important link!
If you are in a position where you can’t improve your credit rating or your bad score is preventing you to make important purchases such as a house or new car, what should you do?
You can also get a car through an auto dealership that offers “buy now, pay later”. You can finance your car through “buy here pay here” dealerships (also known as “tote-the-note”), even with bad credit. If you pay on time, certain buy here,pay here dealers report this to the credit bureaus.
Regularly making payments will help the credit bureaus to see that your payment history is reliable, and therefore increase your credit rating. You will be more likely to receive future credit (such a a loan for a car or home) as your bad score improves.
When choosing the right dealer, you should be very careful. They may not all offer credit reporting, and some will only promise to do so. If you are looking for a buy-here, pay-here dealer, make sure to do some research and confirm that the company will indeed report to your credit bureaus.
In a similar vein, those without credit may also be able to benefit from buying here and paying here. Even though many people have purchased new cars or homes on credit, they find it very difficult to qualify for loans. Buyers with poor credit ratings can build credit through BHPH dealers.
If you select the right dealer, and make sure to keep your payments on time, buying a vehicle through buy here,pay here can be a good thing for your credit.