How To Maximize Your Chances Of Approval On Your Next Car Loan?

One of the worst things an applicant can do when it comes to bad credit car loan is what we called in the business as "credit seeking"

. It is the behavior of one individual applying for credit to many lenders in a short period of time. When you apply for credit or a loan, you will submit a credit application, and the loan provider will automatically pull a credit report or "bureau" on your behalf. And the credit bureau will show your current credit status, your credit history, a loan that is under your name. But if you are not patient enough to wait for an answer, you may apply to a second car loan provider thinking don't put all your eggs in one basket. Although this behavior is perfectly logical in the real world, but in business world, your first transaction will show up on the credit report when the second loan provider pull your credit bureau. So the second loan provider knows very well you are trying to apply to as many lenders as possible. That signals two things to the lender, for one you are not a loyal customer who will be committed to their business, secondly there is a risk the first loan provider may approve you first, and it will be a completely waste of time for the second provider.

Imagine you did this several times, and your credit bureau is getting much worse as times goes on. This is what we call "credit seeking" it is a death sentence for your car loan. Now your chance of approval is virtually zero. And you can only cross your fingers that the first lender didn't pull another credit bureau to see your history again. There are some key differences between what we call a "soft hit" and a "hard hit". Soft hit has no impact at all on your credit bureau, it usually means the individual has requested his or her credit report themselves. Where as the hard hit means a third party or business requested the credit report on behalf of the customer. Only the hard hit will be recorded not the soft ones, therefore it is perfectly ok for yourself to keep track of your credit score, where as pulling repeat hard hits will certainly damage your credit score further.

by: Rick Li

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