If you are in the market for a BHPH car loan, then you probably have bad credit. So, you’re wondering how to get bad credit? Below are great ways to further impair your credit score. (Word to the wise, do the opposite of the following.)
1. Don’t Pay
If you don’t pay your bills, then your account could be charged off and creditors will pursue you diligently. Even if your account is closed, you can still damage your credit by not paying your bills. To get courts involved, don’t pay spousal support and/or child support, which could get you arrested and sued for the payments you missed.
2. Late Payments
This is a great avenue to destroy credit. By paying bills late, your score will drop dramatically. Over a third of your credit score is payment history. To increase late charges and negative credit reports, do not set credit reminders and overcharge beyond your means on all your credit cards.
3. Credit Applications
Apply for all types of credit cards that you’ll never use for promotions and discounts. You’ll have numerous credit inquiries which will show creditors that you’re a risky client.
3. Loan Default
Don’t pay loans that are due. For example, don’t pay your auto loan and get your car repossessed. This is an excellent action to plummet your credit score, and it could put you close to bankruptcy, especially if you default on your home loan!
4. Maximize your Credit Cards
Charge the maximum amount on all of your credit cards. By charging the maximum, your debt-to-credit ratio will skyrocket. Creditors do not fancy high debt-to-credit ratios, and your credit score will reflect their lack of admiration.
5. Don’t Pay Parking Tickets
Parking ticket, forget about it! This is a bill like any other. Avoid paying parking tickets and fines will stack up. These fines could be sent to a debt collector, and this means your credit score drops.
6. Closed Credit Cards
If you think you closed your credit card, which has yearly fees or a pending balance, but it’s still active, it’s still your neglect. Active “closed” credit cards will lead to fees, charges and another drop in your credit score.
7. Get Evicted
Timely rent payments do not help your credit score. However, missing rent payments until you get evicted will hurt your credit. As a bonus, an eviction could hurt your ability to rent another apartment or house.
If you follow all of the above advice, you should be able to drop your credit score significantly. Let us know if you have any other brilliant means to destroying your FICO score.
Disclaimer: Destroying your credit score is not recommended as it will lead to serious financial stress. Depending upon your chosen path to credit collapse, you could end up with criminal charges.
Guest post by Rian Taylor, BHPH marketing expert at DRIVE 1 AGAIN Used Cars in the Denver, Colorado metro area. Follow her on Google+
Please give my readers a history of Auto Mart. How long has your car dealership been in business?
Auto Mart was founded in 2012. We opened Auto Mart after 40+ years of combined experience in the new car industry. We noticed a large gap existed in the ability to sell customers with deep second chance credit.
Does your dealership primarily sell domestic or foreign used cars? Or would you say it’s a mix of both?
We sell a pretty equal mixture of domestic and foreign used vehicles.
If a person has just declared bankruptcy and they want to buy a vehicle, what do you suggest they do?
If your bankruptcy is cleared, that day you have quite a few options. If you just declared bankruptcy it makes things more difficult. There are a small handful of second chance banks that will finance someone and a buy-here-pay-here lot willing to gamble could help you. If you declare chapter 13, you would need a letter approving the purchase from your trustee.
Should a consumer run their own credit report before they purchase a used car?
Yes, before any major purchase actually. Many times there are errors on your report that someone can fix. For example a car that you purchased and had to give back that is still reporting, a repo that is still reporting open or a tax lien that is delinquent that you have a payment arrangement for. Even with bad credit these things can make it much easier or harder to buy a car.
Should a consumer bring any documentation with them before they walk into the car dealership?
Yes. Always bring your most recent 2 pay stubs, any award letters or your last 3 months bank statements if you don’t have the other two. You also need to prove where you live, a utility bill or phone bill works. And most dealerships need references any more, usually 3-10.
If you’re divorced and as a result of that divorce have bad credit, what tips would you offer the consumer on how to obtain a loan?
It doesn’t really matter how you attack it, contract law supersedes divorce law. So no matter the credit situation resulting from a divorce your in the same boat.
What are some common buy here pay here misconceptions the public should be aware of?
There are quite a few, the main thing to realize is that every car dealership is different. One might have high mileage, older cars, one might have exotics. Since buy-here-pay-here’s rules and polices are set by the individual owner, every dealer is completely different. I suggest consumers shop around until they find a fit for them.
This is our thirty second 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+
Tell my audience about yourself. What made you want to start your website onecentatatime.com?
I was regular personal finance blog reader, I read sites like Get Rich Slowly, Simple Dollar, etc since 2006, after I came to this country in 2005 from India on a work visa. I wanted to learn the financial system here and ways I could save money being in a foreign land.
Slowly I realized I was a bit different from these bloggers, I grew up in poverty in a third world country and frugality was necessity there, not a choice. I thought I could add values by putting my approach to personal finance in public.
Being in the software industry, setting up a site and starting with my own blog was easy for me, what took real time though , was to acquire the writing skills that might fit the readers here. It took real courage to start with OCAAT, having English as my third language.
I was inclined towards better financial management since the time I was learning maths and languages, it was the trait my father possessed and passed on to me. Then, combine that natural liking with an ambition to put my voice in public.
All these things contributed to formation of the blog One Cent at a Time.
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?
This is one of my favorite topics in personal finance, I have quiet a number of posts on the category “Financial Disaster”. While it’s always best to prepare for such disaster, it’s not uncommon that people still find them midst of a financial meltdown, simply because they were not prepared for it, even the high income earners.
To answer the question, I’d assume there weren’t sufficient insurance coverage and emergency fund cushion available to the person who underwent a similar disaster recently.
The best thing to protect credit is to sit in the drawing board and re-budget finances. I’d immediately try to find temporary respite with long-term balance transfer credit cards, if I can’t pay the minimum due for next few months.
There are cards available that offer even 12 months interest free balance transfer, I’d use that to consolidate my credit card balances to one such card. Then I’d see if I still need the car where I’m paying the car loan. My immediate action would be tos ell off the car and rely on public/friends’ transport for my travel need. Or a less costly used car which I can buy from the sell proceed of my current car.
So far I have taken care of my credit card dues and car loans. Now let’s take the mortgage and student loan situation.
Mortgage can be handled the way car loan was handled in my hypothetical scenario above. I’d sell my house and move in to a rental apartment. In extreme situation, living with parents is far better than living on streets (you got my point, right?)
Student loan, I’d try to pay off the minimum amount, by whatever way possible. By cutting my budget, by taking up side gigs, etc.
When a person walks into a car dealership what are some credit questions you recommend that consumer ask the salesman or finance manager?
I think I should tell your readers that I have car loan where I am paying 0% interest on 5 year loan of $14,000. That was only possible due my extremely high credit score. Now one tip, do get your credit score before beginning your search for a new car.
1. Ask them to hold off on credit inquiry, till you have the final decision to buy
2. Interest rate for the score range you are in
3. What other companies you can borrow from , apart from the dealer provided default financing option.
4. get some quote from market and compare with what you hear at the dealership and then decide
5. Calculate the true cost of owning the car (adding the total interest you’ll pay) and then decide which car to buy, used or certified or brand new.
How long does the credit restoration process take?
I am sorry I have no idea on this. But, there is a shortcut way to avoid this situation. When you have a good score, get your mortgage done. You’ll no longer have to worry about score fluctuation as long as you stick to purchasing your next car on cash.
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?
As much as possible! I am true advocate of purchasing things on cash. The $14000 car loan I talked about was after paying down $12,000 cash. I won’t suggest people to do the math by comparing the interest rate on the loan with hypothetical rate of return on investment.
To me, if you are debt-free you are really free, it doesn’t matter if you are paying only 3% interest on your car loan and earning 5% return on your investment.
It’s in our brain, we tend to spend money when we have it, when we don’t have money we generally cut down on various expenses.
When you don’t have enough cash to purchase, first consider buying a different car you can afford. Don’t go for brand new Toyota Camry, go for an used Toyota Corolla. In my case yes, the larger payment coupled with excellent credit meant 0% interest rate!
If your a first time car buyer and you’ve never shopped for insurance before, what are some tips to get the lowest payment possible? What are some questions you should ask your insurance agent?
Its tricky and I went through this situation in 2005, right after getting my drivers license. No one were willing to insure me. I had to call up as much as 5 insurers before I could take out my first car from dealership.
You don’t really have much choice when you are trying for car insurance for the first time. You’re not choosers then. So I’d advice take whatever least you get to cover the state required minimum coverage.
Then wait for 2-3 months, and again start shopping around for lower rate. My first premium to 21st Century was $1250 for 6 months. within 6 months I was able to bring it down to $890. And within a year I was paying less than $500. Now for our two cars we are paying only $678 for 6 months.
I don’t think talking to insurance agent would reduce your premium, you can do it online or by calling their call centers. go for absolute minimum coverage that is required by law. having a good conversation is not going to reduce your premium in any way.
Besides onecentatatime.com what are some of websites/blogs you would recommend our visitors visit while trying to improve their credit?
I’d recommend going through Daily Finance, Wise bread and Mr. Money Mustache. They are my favorite. Credit.com’s ‘blog’ section is also an amazing place to learn everything related to credit.
This is our thirty first 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+
The 2005 Ford Explorer 4×4 is a typical of most of the Ford lineup. By that we mean, it is a lot of vehicle for the money. The on demand 4×4 is a great feature, and the 6 cylinder engine provides a trouble free power plant. However, there have been some problems with the overdrive transmission. It will be a good idea to put the vehicle through its paces on the test drive, and secure a long term warranty as a backup. There is also the ever present Ford rot issues along the rear wheel wells. They haven’t figured out how to deal with that after decades of trying.
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 10 years. He enjoys traveling and sports. Follow him on Google+
