Is it Possible to Finance Equipment with Bad Credit?

If you are a company that has bad credit and you are looking to finance equipment for your business you might be wondering if you will be successful in getting the right lease or loan? Bad credit can be defined as having a credit score between 550 and 620, which means you are a high credit risk to lenders. In order for you to finance equipment with bad credit, you have to prove you are not a high risk. You are able to do this by raising your score overtime or you can start by taking the negative information off of your report. Show that you have a better payment history over the past couple of months and you’re working towards being a better borrower.

What’s better, a bank or an alternative lender?

If you have less than a 620 FICO score, you are unlikely to be a candidate for a loan from a traditional lending institution like a bank. Equipment financing with bad credit, however, is much easier with alternative lenders, like Charter Capital. A lender like Charter is a better route to follow because they will have more lenient requirements. At one time or another, just about every active business will face the challenge of replacing an old piece of equipment or a software program or acquiring new widget machine to help keep their business competitive or to accommodate growth. These are good challenges to have. The challenge that’s not so good is figuring out how you’re going to pay for it. What you really need it to know what your options are and that’s where Charter Capital can help.

When a customer applies for a loan or a lease, Charter creates an individual transaction profile that identifies all of the major decision components used by our lenders. We match that against profile against our Matrix to determine the best lenders for that customer’s specific need and present that information to our customer so they can make an intelligent choice. When a customer with bad credit asks for assistance the process is still the same.

A few steps to repair your credit score:

There are a few things you can do to lower your borrowing risk if you want to better your chances of getting approved. One thing you can do is show that your business is booming. If you can show that your business has been increasing over the past couple of months lenders may be more forgiving when it comes to bad credit. Another thing you can do is find someone who is willing to be a trusted cosigner. This person should be someone who has a better credit score than you because this will allow for a more desirable rate. Lastly, you can make a big downpayment from the beginning. Lowering the loan amount from the very beginning will show lenders you’re committed to paying it off quickly. 

Financing equipment with a bad credit score might be challenging, but you have the opportunity to improve your score in the process. Follow the simple steps to achieve a better credit score and in turn, you will prove you are not a risky borrower.

Why Is My Credit Score Dropping?

I am trying to repair my credit, but it keeps on falling. What am I doing wrong? Why is my credit score dropping?

Five Credit Score Factors

Banks have their own precise terminology and ways of doing things that can be confusing to the Average Joe. You might be surprised to know that the Fair Isaacs Company (FICO) credit score was used for years before the financial industry told anyone about it. For some, the calculation method for credit scores is a bit arcane, cryptic and Byzantine.

You need to understand how your credit score is calculated before you can fix it. A credit score dropping could be a sign of many problems. To start with, here are the five factors used to calculate the credit score, along with the weight, it has been given:

  • Payment History is 35%
  • Credit Utilization Ratio is 30%
  • Credit History Length is 15%
  • New Credit is 10%
  • Credit Type is 10%

Some of these calculations are counter-intuitive; for instance, you might have very good intentions in repairing your credit, but your actions might be causing it to fall. What are some concrete examples of how this can happen?

Closing Credit Card

You might have worked diligently to pay off an entire credit card. Then, you might have closed the credit card account, thinking that your score would rise. Unfortunately, by closing your account, you have reduced the amount of credit available, so your score might drop.

Missing Payments

Sometimes, it might take time for a negative mark to be added to your report. A court might have issued an order that lowered your score. You should check your credit report every year.

Applying for Credit

Here is another one that is counter-intuitive. Every time that you apply for a loan, your credit score might fall a little. Why? Banks believe that those who apply for loans regularly are having problems paying their bills. Financial institutions might see your loan application as a cry for help. You need to time your loan applications carefully.

Maxed Out Credit Card

If you are trying to repair your credit, you might try to max out an entire account. Once again, this might not be the wisest decision. Your credit score dropping could be due to having too much debt on one account. The best course of action is to have 33% to 40% of credit available on each card. This makes it look like you are faithfully handling your financial responsibilities. Financial institutions keep very good track of everything that you do.

Credit Repair Services

Credit scores are vital to all facets of your life. Unfortunately, the arcane credit score system can be very difficult to comprehend. Fortunately, you can contact professional credit repair services to help you raise your score.

Whose Credit Score Is Used On A Joint Auto Loan?

There is a multitude of reasons why someone may choose to apply for a joint auto loan. Some of those reasons include having poor credit, limited credit history, or insufficient income to purchase a car individually. Regardless of the reason, one seeks a joint auto loan, there are several questions will come to mind.

Whose credit score is used on a joint auto loan?

The question of whose credit score is used on a joint auto loan is probably one of the most important. Incomes can be combined, but credit scores, unfortunately, cannot. The truth is that it is important for both parties to have an acceptable credit score and payment history. The lender is taking both applicants’ credit history and financials. Both applicants will be listed on the loan, car title, and will share responsibility for repayment.

What are the benefits of getting a joint auto loan?

A joint auto loan can help you get approved for a car loan you could not qualify for on your own otherwise. This can include a larger loan amount as well as a lower interest rate (APR). Lower interest rates on loans mean that you pay less interest over the lifetime of the loan.

Is a joint auto loan the same as having a cosigner?

The short answer is no. In some ways, getting a cosigner is like a joint auto loan. This is because in both cases it can help you get a loan approval. However, a joint auto loan means that both parties own the car and are responsible for repaying the loan. Joint auto loan applicants both share responsibility for damages caused should there be a car accident. A cosigner does not share joint ownership of the car, however, has a liability to repay the loan if the main applicant fails to make payments. A cosigner with excellent credit can improve your chances of being approved for a loan while allowing you to retain full ownership of your new vehicle.

Can I remove a joint applicant or cosigner?

If you improve your credit and financial situation, you can greatly increase your chances of getting an independent loan approval. You can re-finance auto loans and transfer to sole ownership if you meet the requirements to qualify for an auto loan on your own. Poor credit is not a lifetime sentence. There are several ways you can improve your credit history and credit score. The most important part is having the dedication to do what it takes.

Credit Score of 520: Home Loans, Auto Loans & More

Your credit score is a golden number that can make you or break you when it comes to getting approvals for the things you want in life. Your credit score can be positive enough to get an okay on a car you always wanted, or it can be low enough to cause lenders to turn you down perpetually. If you have a 520 credit score, you may qualify for some things, but the lending criteria will be much different for you than it will be for some other people. The following is some additional information about the 520 score.

The FICO Scaled

FICO is easily the most commonly used credit rating system that exists. If you have a 520 rating, it means that you are lower than the middle score between 350 and 800. The category that creditors will put you in at that point is the poor credit category. A score like that usually has a strong delinquency behind it. You can recover by getting some credit and then making faithful payments no matter what’s going on in your life. If you plug away for six to 12 months, you should see a significant rise in your score. Until then, you may have some difficulty getting the financial products that you desire at a rate that you can appreciate.

What 520 Means for Personal Loans

A personal loan lender will approach your credit score in one of three ways. This type of lender may outright deny you. The second option that the lender may take is an option to request collateral from you. The collateral may be something such as a title lien that you allow them to get or a home deed. The other approach they may take is charging you an extremely high-interest rate. For example, you may get the loan, but your interest rate might be 20 percent as opposed to 6 percent.

How a 520 Affects a Car Note

Car dealerships work with just about anyone. Your success depends on the dealership that you go to. You do want to get a car, but you don’t want to get into a deal that you can’t afford. Therefore, you must take your time, conduct thorough research and negotiate for yourself.

What You Can Do About a 520

You can start building up your score once you get the opportunity to utilize credit responsibly. Timely payments make up a huge portion of your credit score, so you want to make sure you make your payments swiftly, and you never get behind. One bad payment can push your score back many points, so you want to avoid that like the plague.

A credit repair service can also help you to boost your credit and get back on the radar as a responsible payer. Experts who offer these services can help you get back on your feet and obtain the buying power that you once before had. Call for a consultation to see how they can assist you today.