Since the recession, numerous individuals with bad credit have been unable to secure loans for a new vehicle because lenders tightened their restrictions.
However, a new report from Experian Automotive says financing providers may now be more willing to extend loans to credit-challenged consumers.
In its quarterly analysis of the credit industry, Experian found loans to shoppers with poor credit increased 11.1 percent during the first quarter in a year-over-year comparison. Subprime loan candidates accounted for 6.16 percent of all loans during the first three months of the year – a jump from the 6.16 percent recorded a year earlier.
"As the automotive credit market continues to stabilize, lenders are showing a higher tolerance for risk," said Melinda Zabritski, Experian's director of automotive credit. "Additionally, with lower average scores for new vehicle loans and more loan activity for credit-challenged customers, it is easier to find a loan now than at any time in the past 30 months."
Although a number of Americans are now able to get the financing they need to purchase a car, many of these credit-challenged individuals may be settling for loans with high interest rates. One way they may be able to boost their credit scores, and thus, potentially qualify for a lower rate, is by reviewing their credit reports for errors.
In some cases, a credit company may misreport information about people's accounts, which then appears on their credit records. Rather than let a mistaken negative mark affect their scores, consumers may want to contact a credit repair attorney to help them investigate and dispute the unfair item.