Why The Holidays Are The Best To Buy A Used Car

How To Improve Your Credit Score – Learn the Fastest Way Now

What are the top 5 reasons why the average American has bad credit? If you don’t know, that’s okay. You’ve landed at the right place to help you understand it and assist you to improve your credit score!

Many of you have likely been told that your credit score is extremely important and can have a huge impact on your wallet and overall life.

How big you ask?

Try potentially hundreds of thousands of dollars, not to mention countless lost time.

• The Impact of a Credit Score
• How Your Score Works
• How to Improve Your Credit Score
• Your Budget is Your Best Friend When Improving Your Credit
• Be In The Know By Checking Your Credit
• Pay Off All Accounts, Even Delinquent Ones
• Make Early Payments to Improve Your Credit
• Tips to Quickly Improve Your Credit Score
• Keep it Clean & Improve Your Credit Score

Let me give you three scenarios to see how big an impact your credit score makes.

Let’s say that your neighbor Mary, who has a great credit score (760+), purchased a used $15,000 vehicle and was approved for $0 down and got payments of $400 per month.

Her interest rate was 1.86%

Your other neighbor John purchased an identical vehicle at the same price point, but his score is in the 600’s. He managed to get $0 down and got the same payments of $400 a month.

His interest was 14.39%.

Lastly, you purchased a vehicle just like theirs, at the same price, but with a credit score in the 500’s or below. For the sake of this example, we will say that you managed to get $0 down as well (extremely unlikely…no, nearly impossible) and got payments of $400 as well.

Your interest rate was 23.99%.

Mary would be paying for roughly 43 months and would generate a little under $600 in interest.

Total cost of the vehicle would be around $17,200.

John would pay roughly 58 payments and would generate a little over $6,500 in interest.

Total cost of the vehicle would be around $23,200.

You would pay roughly 90 payment and would generate a little over $19,300 in interest.

Total cost of the vehicle would be around $36,000.

Do you see how insane this is??

You are paying over double the amount of the vehicle just because of your credit score!

Now imagine what that would amount to when you’re dealing with purchasing a bigger ticket item in the hundreds of thousands.

Think you won’t be purchasing something that expensive? Think again.

Your Biggest Dreams Are Tied to Your Credit Score

A very common dream I hear when I speak to our customers is having a dream of owning a nice home and having a family, but knowing that a nice home is going to cost you over double or more might make you reconsider.

A home loan could easily hit the hundreds of thousands, especially here in Fresno, California.

With the car example that I showed you above, I focused on the money you would be paying just for the car. If you take a look again, a point that is even more important is the additional time that you are paying.

Your scenario would require you to pay for nearly double the amount of time of someone who has good credit.

Having bad credit means that you would need to be away from your loved ones longer. You would need to be working so that you can make the additional money to make the payments on all of the things you are financing.

Sound unfair?

It is, but not in the way you might think.

Let’s say that you’re living in a home and someone approaches you to rent a room. They offer to pay $800 a month and have it to you at the beginning of the month, without fail. You figure that it’s a lot of money and you don’t have to do anything but let them crash in a room you’re not even using so they move in.

Fast forward 3 months later and you haven’t received a penny.

You’ve been trying to talk to the person and have made no contact so you decide to just burst into the room and realize that the walls have holes in them, the carpet is burnt and stained, the closet door is cracked, and although this person has their own bathroom…they may have decided it was too far.

What would you do?

You Have a Choice

Like most people, you’d likely kick them out, and rightfully so. But here’s the real kicker.

This person goes to your parents and asks them to rent out a room. They tell your parents that they rented from you so it should be all good. Your parents would like the extra cash and think it’s a good deal but they decide to call you first to ask what your opinion is.

What would you tell them?

This is exactly what is happening when someone pulls your credit.

They are simply seeing a record of how well you held up your end of the bargain. Instead of a room, it’s everything else you’ve borrowed money on.

This applies to things like credit cards, car loans, leases, personal loans, etc.

No one wants to lend money to people that don’t stay true to their word, yet there are people that still do. Why?

There are people that have fallen on hard times and deserve second chances and there are companies like ours that recognize that.

How Lenders Reduce Risk

Now, how can your parents make sure that they can reduce the amount of risk by allowing the tenant to stay at their place?

A higher deposit upfront, higher rent, frequent checkups, lower tolerance for excuses, etc.

The troublesome tenant will need to pay more because of their past mistakes. Rightfully so because they have burnt the people from their past.

It has now become the tenant’s responsibility to prove that they are someone who delivers on their commitments and will not continue down the same path as before.

I could tell you little tips and tricks on how you can improve your credit score quickly but I don’t believe in applying bandaids to a waterfall. If you don’t understand the root of the problem, then you’ll never repair your credit long-term.

The real issue stems from a lack of understanding of finances.

Most people hear the word budget and automatically assume something negative. They picture themselves sacrificing all of the things they love and enjoy because it doesn’t fit into their “budget.”

This is far from what budgeting really is.

Having a budget and actively tracking it allows you to have an awareness of where your money is going.

You want to control your money, not let your money control you.

You can check out our post on what is budgeting and how it can change your life here.

So how can you do this?

#1 Find out how much money you are bringing home.

This may sound redundant but it’s one of the questions that our customers usually never get right.

Knowing how much money you bring home creates the foundation for everything else.

#2 Look at your last 2-3 months of expenses

Taking a line-item look at all of the money that went out for the past few months can give you a very accurate idea of all the things you are spending on.

The first time I did this I realized I had purchased clothes that I had never even worn and subscriptions that I was not using anymore. Don’t be scared of doing this, this is the moment where you empower yourself.

There are apps like Mint, Personal Capital, YNAB, that make this easy if you have bank accounts and credit cards.

Without accounts, you can still manage this by gathering up your receipts but if there are no receipts then you can skip to the next step.

#3 Set a budget

Again, this doesn’t mean cutting everything out. You have to think about the things that are important to you and cut out everything that is not.

If you enjoy a couple of nights at the club every month, budget them in.

Enjoy having nice wine with your meals? budget it in!

What about your subscription to Loot Crate or Dollar Shave Club? Budget them in!

Anything else that brings you no pleasure…out!

The extra food that you buy that no one eats and just rots? Set a limit on your groceries. The cable TV that no one watches anymore? Cancel it and keep just your internet. The shirts, blouses, jeans, skirts, and makeup you purchase but rarely use?

Again, you can check out our post on what is budgeting and how it can change your life where we break things down for you further to help you pinpoint things better.

#4 Track your spending

This is crucial! Without tracking your spending, it becomes very hard to accurately stick to your budget. This is identical to step 2 but on an ongoing basis.

At first, you may want to consider doing this every week or couple of weeks. As you get into the flow of it all you’ll start getting fewer surprises and be able to do it on a monthly basis where it will only take you a couple of minutes to review.

So why is this important?

Because once you are in control of your money, you can start setting money aside for special events, goals, trips, but most of all “emergencies.”

Why do I place emergencies in quotations?

When you have no savings, every additional expense becomes an emergency.

It is either a small emergency like your kid needing new clothes for back to school or a big emergency like your car breaking down and you needing to purchase another. The more you plan for these events, the less they appear like emergencies.

You no longer need to borrow money from payday loans, credit cards, or a family member/friend.

Similar to being aware of your finances, being aware of your credit can make you aware of the severity of your situation and can help you make a plan moving forward.

There are applications that can help you do this easily like Credit Karma or Experian. These apps are great for helping you keep a broad idea of your score, as well as quickly catching anything that may have been added without your knowledge throughout the year. However, they are not always super accurate.

In order to get an exact picture, you can run your credit once a year from all three bureaus for free by ordering them from annualcreditreport.com.

Tip: Check for Errors

Checking your credit reports for errors and fixing them can make big impacts on your score.

• Personal information (incorrect name, wrong addresses, job history, etc.)
• Accounts not listed
• Any accounts never opened by you
• Inaccurate accounts
• Fraudulent Activity
• Inaccurate inquiries
• Wrong bankruptcies, foreclosures, repossessions, etc.

If you’re thinking, “A wrong address won’t impact my score.”, then you’re right. It won’t, but it can lead you to catch things that may, like fraudulent activity.

If there is an address from Texas that pops up and you’ve never lived in Texas or know anyone who has, you may want to look into it and find out what is happening.

Also, there are local lenders who read your report to get a general idea of your living history. They may consider you a higher risk if you have an address from outside of the area.

Take the time to look through these and dispute any incorrect information to the correct bureau.

This may sound obvious to some, but if you have accounts that are past due, get them current! Late payments make a big impact on your score and the longer they stay overdue, the more they affect it.

You should always make sure that you make your payments early.

If you see charge-offs on your report, it’s even worse. This means a lender has deemed your account unpayable, canceled the account, and you are no longer able to make minimum payments on it.

So what can you do?

If you do not have many late payments, you may be able to ask your lender to take the past-due payments away. When they agree, they will refer you to submit a dispute to the bureaus and remove them like that. This may not always work, but it’s always worth a shot!

If you have charge-offs, you may be able to negotiate with a lender to remove the negative mark off your record. Depending on the lender or collection agency, you may have to pay the account in full or may be able to negotiate a smaller amount. Make sure to get the agreement in writing before you pay and keep receipt of the payment as well.

From here on, make sure to ALWAYS pay your accounts early. My personal recommendation would be to never pay the minimum payment on anything. Your accounts should be paid in full, without question, no matter what.

Start viewing your credit cards as debit cards. If your budget is in play and you do not have the money in your bank account, you do not have enough to pay. It doesn’t matter if you will get the money with your next check, it is not there now.

These two habits will help you tremendously because they will develop the layer of trust your lender needs with you, but most of all, that you need with yourself.

“Increase my credit limits? Shouldn’t I be cancelling and cutting up my cards?”

There’s two ways to answer this.

The Impulsive Side Of You Won’t Let You Improve Your Credit Score

If you know you are impulsive and unable to control yourself with a credit card then yes, please cut up your cards but don’t cancel the card unless you know you won’t be able to stop yourself from ordering another!

You Can Control it and Use it to Improve Your Credit Score

If you know you have things under control then the good thing is that your score only cares about utilization so call up your lender and ask for an increase.

Closing an account can drag your score down, while getting an increase to your limit can drive it up.

The higher your limit, the less utilization of your revolving credit you have. Keeping your usage under 30% is great for your score, it’s considered a healthy level. Anything above that and your score can start taking a hit.

The same thing applies for getting a new card.

Tip 1: Increase Credit Limits or Get a New Card to Improve Your Credit Score

Your credit usage increases and you get a new line of credit into the mix. Remember to use it strictly as a debit card and pay it off in full so you are never in debt.

If you are used to spending $300 a month and your limit is $500, then you are using 60% of your revolving credit. However, with an increase of your limit to $1000, those $300 only take you to 30%!

When your lender sees that you’ve paid off accounts and have maintained a good payment history, they will be more likely to increase your limits. You can ask for an increase every 6-12 months and especially so once your score starts increasing dramatically.

Tip 2: Rent, Utility Payments and Bank Account History

There are programs that can add your Rent and Utility payments, as well as Bank Account History to your credit reports, which instantly boosts your scores.

Programs like ExtraCredit, Experian Boost, or UltraFICO can have a good impact on your score. Some might cost a fee so make sure to assess if it is worth it to you.

Tip 3: Secured Cards and Authorized Users

If you are having a hard time getting approved for a credit card, a second step could be applying for a secured card. They require for you to put an amount of money to back the line of credit they are providing you.

This ensures they report your payment history but keeps them safe since they would simply use your money if a payment did not come in.

Becoming an authorized user on someone else’s credit card can net you their entire credit history on your report.

Not everyone works in this situation since getting added on to someone who has had a horrible payment history will only affect you worse.

Tip 4: Shop for 0% Interest Deals

Who would give someone with bad credit 0% APR financing?

…That’s right, you guessed it. Westland Auto Sales.

At Westland Auto sales, we always recommend paying off a vehicle in full, but we offer an In House no interest option to our customers who are serious about improving their credit score.

By putting a large down payment on a vehicle and paying off the remaining balance in regular payments for 10 months or under, you get to improve your credit score drastically.

The varying mix of installment and revolving credit does wonders to your credit profile.

We’re the only ones within the Fresno, California area that offer this but that doesn’t mean you can’t find someone within your state that does something similar.

Remember that the impact of your credit score is massive and can propel you in a very good direction, or a very bad direction. Don’t be the troublesome tenant that will sink further and further into his own doing.

Take charge of your life and create a budget for yourself so you can always stay on track. Check your credit and pay off all of your accounts, delinquent or not. Create a habit of making all of your payments on time, always, no matter what. And finally, look into increasing credit limits to decrease your overall credit usage.

Your money matters, and so does your time. Make sure you are using it wisely.

Disclaimer: The information provided in this article is for educational purposes only. It is not financial advice. Always consult with a qualified financial professional for personalized guidance.

What is a Buy Here Pay Here Dealership?

The phrase Buy Here Pay Here (BHPH) gets thrown around a lot when it comes to the car industry. Many people sing high praise for a buy here pay here dealership while others, especially employees of other traditional dealerships, seem to have nothing but bad to say about it.

The truth is, most people don’t really understand what a Buy Here Pay Here dealership really is or why it is even around.

So…what is a Buy Here Pay Here Dealership?

• What is Buy Here Pay Here Dealership?
• Second Chance Lenders for Bad Credit
• A Buy Here Pay Here Dealership for the Win!
• Why Doesn’t Everyone Finance at a Buy Here Pay Here Dealership?
• No Two Buy Here Pay Here Dealers Are the Same
• Who Benefits From a Buy Here Pay Here Dealership?
• Don’t Let the Bad Apple Ruin the Bunch
• Buy Here Pay Here Dealership: A Stepping Stone to a Better Life

It’s a form of lending done directly by the dealership where the vehicle is being purchased.

Many of you may be asking right now, “Don’t most dealerships provide you lending then and there?”

No.

See, at a dealership that does not offer Buy Here Pay Here, customers go to find a vehicle they love first. The dealership then shops your application out to numerous lenders to see who will approve you under the best terms.

This is assuming you are not paying cash or coming in with your own financing.

For customers that have stellar credit, this is never an issue.

Most banks look at a customer with great credit and are rarely concerned about the proof of the customer. The credit score lets them know everything they need to know about who they are dealing with.

As credit score decreases, lenders start getting more strict. The number of companies willing to compete to purchase the application drops drastically.

There comes a point when a credit score drops so low that most lenders are not willing to touch the application.

The only options people are left with are a very limited number of lenders that specialize in working with bad credit car loans.

These lenders are called second-chance or subprime banks.

They tend to be extremely firm about verifying everything put down on the applications as well as having additional requirements. These include a much higher down payment, higher interest rate, and lower tolerance for late payments.

These are ways for them to be able to offset the higher risk involved in lending money to someone with a low credit score.

If you’d like to learn about how the credit scoring system works, make sure to check out our article on How to Improve Your Credit.

Eventually, a score can drop so low that even these lenders are not willing to purchase the application.

So what happens then?

The Need for Transportation Doesn’t Stop Because of Bad Credit

People still need transportation and in many cities, most actually, public transportation is not a viable solution for them. The ability to walk or ride a bicycle to get around is not a real option either.

In Fresno, CA, where our dealerships are located, it would take you hours to walk from one end of the city to the other. If you think the bus could get you there much quicker, think again. There are not very many busses running so people spend more time waiting for a bus than they do on it to get to their next route.

It’s bad enough to be without a car within our same city, even worse if you needed to get to the towns next door to us like Selma or Madera. It becomes nearly impossible.

Most people don’t have $10-20,000.00 just lying around to purchase a vehicle for cash.

Financing has become a crucial part of the American system. Without it, most people are left dead in the water, with no way to get ahead, let alone get around.

Enter the world of Buy Here Pay Here dealerships.

A Buy Here Pay Here Dealership Can Help

A Buy Here Pay Here dealership, also known as an In House financing dealership, can provide customers financing on their vehicle when everyone else has turned their backs on them. They operate in a nearly identical manner as traditional used car dealerships except for at the end.

They purchase their inventory from the same sources, they repair vehicles, they advertise themselves, and they sell cars.

The difference is all with the financing.

Instead of needing to shop their customer around to different lenders, a Buy Here Pay Here dealership keeps it all…that’s right you may have guessed it…In House.

Buy Here Pay Here dealerships make it easier to get approved since they tend to look at other areas outside of the typical credit score.

So why wouldn’t everyone just finance through an In House financing dealership?

Mainly because In House lots are not made with the typical prime credit customer in mind.

A buy here pay here car lot’s program is geared toward customers with subprime or deep subprime credit scores and is structured as such. This means that many of the vehicles will be more affordable and the down payments/interest rates may be higher.

Understandable considering that the dealership itself, meaning the owners and all the employees that make up the staff, are lending their own money so that their customers can have the transportation they need. It is no longer a massive company that can take on many losses without breaking a sweat.

Every loss, missed payment, late payment, or worse, affects a buy here pay here dealership in a big way.

This also means that there tends to be more contact between the dealership and its customers in order to make sure that everyone stays on track with their agreed-upon payments.

A healthy line of communication is exactly what our customers need. This helps them pay their vehicles off on time and rebuild their credit in the process. And this brings me to a very important point!

No two Buy Here Pay Here dealerships are the same.

Same as you might have a dealership that specializes in selling lifted trucks vs one that specializes in older trucks, In House financing dealerships can vary greatly. Just because they all follow a similar mold does not make them anywhere close to the same.

There is a huge gap when it comes to the quality of not only the vehicle, but the Buy Here Pay Here financing as well.

As I mentioned earlier, most In House lots will provide a more affordable vehicle. This means it might be older and with higher miles.

It doesn’t mean these vehicles are bad, only that making sure you inspect them prior to purchase should be a crucial step of your buying process. It should also be when purchasing anything that is used, but more so here.

At Westland Auto Sales, we strive to provide our customers with nicer, newer, and lower mileage used vehicles. You should not only feel proud of what you’re driving but at ease that you won’t deal with breakdowns or repairs on a continued basis.

We take that a step further by providing a free 2-year warranty. Talk about peace of mind, right?

You can also count on a lower and more affordable down payment. Having a little extra money in your pocket can make all the difference when it comes to those unexpected emergencies, am I wrong?

Nearly all Buy Here Pay Here dealerships do not do this and instead, ask for half down or higher. But the real kicker comes when the customer is already financed.

Improve Your Credit Score with our In House Program

There are very few Buy Here Pay Here dealers in our country that report their customers’ payment history to the bureaus.

In fact, Westland Auto Sales is the only In House dealership from Visalia to Merced that reports to credit in order to help you improve your score and best of all, improve your future.

Make sure that whatever In House dealer you are considering purchasing from will be reporting your timely payment history to a bureau.

By now you probably see that people with bad credit are not the only ones that could benefit from our Buy Here Pay Here financing. Anyone with no credit history can get a major boost by having an installment loan paid off in their report.

Since we do not focus on the credit score and instead more on stability and ability to pay, our program also benefits individuals who may have too many open auto loans to qualify for another.

Many of our customers are in these types of situations where they have additional income that banks do not accept. They need a third or fourth vehicle for a family member but are completely stuck.

In these cases, we can also help their family member build up their credit as a cosigner on the loan while paying off the vehicle. A win-win for everyone!

Buy Here Pay Here dealerships can get a bad rap that normally stems from a few dealerships skirting the lines. They are not in it for the customer and ruin it for those of us that are.

Like any sector, you have your good and bad apples.

Couple that with a lack of understanding of how In House financing works and a salesperson trying to knock out their competition and it becomes even more understandable why many employees of other used car lots bad mouth the financing.

Most owners and employees of In House lots are good people who truly want to help their customers, just as most customers of In House lots are good customers.

Finding the Buy Here Pay Here program that will work best for you is crucial to your experience of paying off your vehicle.

Buy Here Pay Here financing is there to help you get back to more traditional financing.

If you are not reported to credit, you can get stuck in an endless loop. You’ll have to go from one In House lot to another and this can be extremely costly.

Remember, whichever dealership you choose, your payments need to be reported so that they can help you repair your credit.

Now go get yourself back on track to the future you deserve.

Disclaimer: The information provided in this article is for educational purposes only. It is not financial advice. Always consult with a qualified financial professional for personalized guidance.