Advice for Those with Bad Credit Issues


If you have bad credit, don’t worry because you’re not alone. Many Canadians have less than perfect credit at one point in their lives and are still able to get it back on track through a gameplan and discipline. In this article, we’re going to break down exactly what you need to do in order to overcome your bad credit and get approved for a car loan. Believe it or not, most dealerships are eager to work with all credit types in order to get drivers behind the wheel. So if you find yourself in a bad credit situation, make sure you follow these steps and get yourself back on track!

The Four Steps to Overcoming Bad Credit Issues

  1. Investigate Your Credit History
  2. Ditch the Assumptions
  3. Visit Your Car Dealership and Investigate All of Your Options
  4. Make Your Payments

Step 1: Investigate Your Credit History

Many people who are not financially responsible do their best to ignore their credit score until they absolutely have to look into it. Why would someone be forced to face their credit score? Because they’re looking to get a car loan, a mortgage or even a personal loan. So if you’re looking for a car loan, you’re going to have to pull your credit report. Don’t worry though, you can get a free physical copy of your credit report from both Equifax Canada and TransUnion Canada and it won’t negatively affect your credit score. Often, people discover that their credit score is not actually as bad as they had thought. Even if it is, you should know there are many ways you can improve that score, and getting a car loan is one great way of doing that. 

Step 2: Ditch the Assumptions

Just as you made the assumption that your credit was horrible, don’t make the assumption that you stand no chance of being approved for a car loan. Dealerships will work tooth and nail to get you in a vehicle and work with people with less than perfect credit every day. While there are definitely barriers to be faced if you’re trying to get a car loan with bad credit, there are many ways around this. Dealers know that one of the best ways to rebuild someone’s credit is to get them a car loan. Assuming the customer keeps up with each of his/her payments, that individual’s credit score will certainly increase. 

car filling up gas

Step 3: Visit Your Car Dealership and Investigate All of Your Options

Once you’ve visited your local car dealership, you’ll understand that you have several options and tough decisions need to be made. You need to decide on how much of a down payment you can afford to pay, as most people with bad credit will be required to do a down payment. You’ll also need to decide on the length of your term, while it is favourable to keep term lengths as short as possible, depending on your situation you may need to opt for a longer-term with smaller monthly payments. One useful tool to use is a car loan calculator. Here you’ll be able to plug in your estimated numbers and get a good idea of how much you’ll have to pay monthly.

Step 4: Make Your Payments!

The absolute worst thing you can do is miss payments or skip payments. As we discussed earlier, getting a car loan is more than just getting a new vehicle, it’s a route to improving your credit score. If you skip or miss payments, your credit score will inevitably drop and you even risk having the vehicle repossessed. If your car were to be repossessed you lose your means of getting around and hurt your odds of getting another car loan any time soon. So if you do decide to get a car loan, budget carefully and be disciplined in making your payments. 

What Goes Into Your Credit Score

  • Your history of payments
  • How much you owe
  • How much of your credit you currently use
  • Types of credit that you have
  • Overall past credit experience

If you’re looking to get pre-approved for a car loan, check out our rates page to see lender’s rates across Canada! Once you’ve seen the rates, complete our short application below and begin the journey of getting a car!

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