Category Archives: Down Payment

Is A $500 Down Payment Enough To Demonstrate I’m A Good Credit Risk?

The most frequent question that is asked of us here at is “what’s the least dollar amount that is necessary to put down to acquire a vehicle?”. While many BHPH dealers have different standards, the most frequent dollar amount required and the most frequent dollar amount available to put down is $500. This seems to be the industry standard. $500 demonstrates your willingness to commit and your seriousness about paying the balance to your dealer. However, if this is your first BHPH deal, do not “over expect”. By that we mean please do not intend on walking out of the dealership with an upper end vehicle. Remember the dealer is feeling you out at first, and his initial cash outlay is much greater than he is taking in. So, don’t be offended if he directs you to a certain vehicle that he is comfortable selling. Also, be advised that you should relay any “must haves” to your dealer; for example 4 doors, air conditioning, multiple passenger, 4×4, SUV etc. Once you establish a history of repayment, it should be easier to upgrade your vehicle.

To sum up, you should have at least $500 down and demonstrate an open mind and willingness to compromise. By that, we do not mean to surrender but be flexible. Check out this site and explore prices and please fill out a loan application. After all, your journey begins right there

This article was written by Brian McCormick of Providence, Rhode Island. Brian is a BHPH expert and has been involved in the used car and BHPH industry for over 40 years. He enjoys his family and his favorite sports team, The Boston Red Sox. He Graduated from the University of Rhode Island in 1970. Follow him on Google+

Interview With Credit Expert Harrine Freeman Of H.E. Freeman Enterprises

Tell my audience about yourself. What made you want to start your website helping people with bad credit?

I started my website to help people with bad credit and prevent them from making the same mistakes I did because I got into debt when I went to college. By the time I was a senior I had 13 credit cards and graduated with $19,000 in credit card debt. I lost my job and was unable to make the minimum payments which ignited by financial crisis.

What products/services does your company provide?

My company provides one-on-one credit and financial counseling and financial literacy education to K-12, college students and adults.

Please name some quick and easy ways for a person to improve their credit even if they’ve recently been through a divorce or some type of financial calamity?

Some quick and easy ways for a person to improve their credit are:

  • Pay old debt such as judgments, liens, repossessions, and collection accounts first then focus on all other debt
  • Keep credit card balances at 20% or less of the credit limit
  • Pay bills before the due date
  • Don’t close older accounts
  • Get a secured credit card and ensure the payment history is reported to the credit bureaus
  • Don’t open more than one new account every 1-2 years
  • When shopping around for a loan or credit get price quotes within 2-4 week period which counts as only one inquiry

When a person walks into a car dealership what are some credit questions you recommend that consumer ask the salesman or finance manager?

I recommend asking these questions before you let the salesman pull your credit report.

  • What is the minimum credit score needed for approval?
  • What information or documents do you need to furnish to receive financing?
  • What payment options are available?
  • What is the interest rate?
  • What fees are charged in addition to the price?
  • What deals, rebates, discounts, perks such as good credit are available on financing and down payment?
    What are the terms of the loan?
  • What kind of car do you qualify for?
  • Are there any prepayment penalties?
  • If you buy from a dealer than caters to people with bad credit or an independent dealer ask if your payment history will be reported to the credit bureaus.
  • What is the late payment policy?
  • Is there a grace period?
  • What is the buy rate?

How long does the Credit Restoration process take?

The credit restoration process can take anywhere from 30 days to years depending on a person’s income, how much debt they owe and how much they can afford to pay towards their debt each month. It usually takes 45 days to fix errors on your credit report. On average a person should see an improvement in their credit score within 120 days.

If a person can’t purchase a vehicle in cash, what’s the ideal down payment you recommend they have? Does a larger down payment mean a shorter loan and APR?

Have at least a 20% down payment unless you’re buying an older car then put down 10%. The 20% payment is usually enough to cover the car’s first year depreciation so that if your car is totaled or stolen you don’t owe more than the car is worth. However if the interest rate is over 7%, wait until you can save more for a larger down payment. This prevents you from being upside down on your loan.

A larger down payment means a lower monthly payment but does not necessarily mean a lower APR. APR is determined by your credit score so even though you put 20% down if you have bad credit you can still have a high APR.

Zero down payment is the best option for a lease because if you put a down payment and the car is stolen or totaled you lose the down payment.

Besides what are some of websites/blogs you would recommend our visitors visit while trying to improve their credit?

H.E. Freeman Enterprises

This is our fifth interview in our “1000 Interview Challenge” If your interested in an interview, please contact me.

This interview was conducted by Shane McC. Shane currently is attending RISD studying computer programming. He enjoys traveling and plays hockey. He played for the Boston Junior Bruins of the EJHL during the 01-02 season. You can follow him on Google+