How To Make Bad Credit Work In Your Favor When Applying For An Auto Loan

Bad Credit, Tips, Used Car Dealer, Used Cars

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bad credit in canada

Bad credit, by virtue of its name, seems… well… bad! For the most part, this is a dumbfoundingly accurate observation. Bad credit can keep you from obtaining the things you want and require; but what if there was a way to use it to your advantage?

That’s not to say that having bad credit can in any way be superior to having good credit, but that if your credit is poor, there are ways to finesse it into something more positive. According to the Royal Bank of Canada, about 4/5ths of used car sales are only made possible with lending. It seems that used car lending is an increasingly necessary reality of our world. To help, here’s a guide for people with bad credit, on how to stake out a more advantageous negotiating position when applying for an auto loan.


An important consideration for many lenders is whether or not an applicant can demonstrate a means for repaying their debt. Proof of employment, is an excellent way to reassure lenders that, despite your bad credit, they have a more likely chance of fully recouping than they’d expect. But how can employment cast your bad credit in a more positive light?

  • The concern lenders have when they see a bad credit score is that the applicant won’t be able to make consistent payments. Lenders are less interested in the prospect of you paying off the loan, and more interested in keeping you on the hook for longer.

  • This means that if you can properly demonstrate an ability to pay consistently, as employment does, then approval is a little closer to your grasp.

  • Employment casts your bad credit in a more positive light, by making lenders think they’ll be able to milk you consistently for an extended period of time.

Well-employed people with bad credit are a dream for lenders because they can become a more reliable revenue stream. Ridetime works with a robust lineup of lenders, who can work with applicants under a variety of conditions, and employment always helps.

Consistent Minimum Payments

Many Canadians see their credit scores crumble under the weight of student loans and credit cards. Failing to pay these off in a timely and consistent manner, will find the debtor in the throws of low credit. However, debt is often actually reassuring to lenders. It’s just a matter of having something that you can show them.

  • Similar to employment, making consistent minimum payments on your debt tells lenders that you’re a dutiful yet constant source of revenue.

  • By making your minimum payments regularly, your bad credit transforms from a sign of your inadequacy to a guarantee of your consistency.  

  • People in debt who demonstrate an ability to manage, though perhaps not escape, that debt make lenders, see dollar signs.

Much like employment, making regular minimum payments on your debts shows lenders that they can rely on you to give them money consistently and for longer. If lenders believe they can rely on you as they accrue more and more interest, then they’ll be eager to approve.

Prioritize Smaller Debts

Like babies, Canadian debt comes in all shapes and sizes. For some, a single haphazard credit card casts a mild blemish on their credit report. Still, for others, massive student loan debt blocks out the sun entirely. For most, their bad credit is composed of all sorts of debts. This does however; present an opportunity to demonstrate progress and reliability to prospective lenders.

  • This is where bad credit becomes superior to no credit at all.

  • Even if, your credit score is overall abysmal, being able to demonstrate that you have resolved some debts in the past makes you seem much more reliable.

  • People with no credit at all will find themselves struggling to prove whether or not they’re capable of paying back a debt.

  • Whereas people with bad credit, who resolved some debts in the past, will seem more than capable of doing so again.

Making debt work for you is a great way to shine a positive light on your otherwise shadowy credit. Paying of smaller debts, before tackling the big ones, demonstrates responsibility and reliability to lenders. The more positives on your record, the less damaging the negatives will be.


The Canadian used car industry is fueled by lending. Nationally, Canadian consumers are in a credit tailspin, and loan approval seems a distant dream. But Ridetime and their network of lenders are here to help. They love working with customers to find a path toward approval. If you or anyone you know is struggling with bad credit, Ridetime is the used car dealer that should be at the top of your list.


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