How to Avoid Predatory Lending Scams
Look, we’ve all been there. Life gets busy, bills pile up, and before you know it you’ve missed a due date or two. Even a single missed bill can have an outsized effect on your credit score: according to FICO, a data analytics company focused on credit scoring, one late payment of 30 days can massively impact your credit score.
Consumers with a 680 score dropped down to 530; those with a 720 fell all the way to 525; and even people with a 780 dropped down to 620. And the news gets even worse: for consumers with a 680 score, it took 9 months to recover after a single missed bill; for those with a 720, it took 2.5 years; and for those with a 780, it took three entire years to recover from one missed payment. Some people may have the luxury of waiting several years to return to business as usual, but many others need to finance significant parts of their life regardless of a handful of prior mistakes.
The credit system of the world often expects you to be perfect, but seems ill-prepared to work when the inevitable imperfection comes to fruition. Consumers often report feeling trapped by one or two missteps. In a recent Forbes article, several ethical people talk about simple mistakes they had made and the hellish consequences they suffered afterward. One respondent was a student deep in his studies of industrial technology and applied engineering who had forgotten about a few Christmas gifts he had purchased on credit. His consequence? An inability to finance his own education without significant intervention. He needed numerous cosigners of high credit to even continue attending his public state university.
These stories go on and on with similar narratives. A professor and consultant who had clients renege on paying her was left holding the bag for their expenses. A law student underwater with tuition payments was forced to use credit cards for simple necessities like groceries and bills. A single mother who was struggling to make ends meet. Without fail, it’s easy to see good people trapped by understandable life circumstances but with few outlets for help. Due to these factors, predatory loans abound to “help” those in need.
By its definition, a predatory loan is a loan in which the lender ignores the borrower’s ability to pay back the debt. They often hide the terms, such as interest and length, in extensive legalese while preying on folks who need cash and can’t access typical lines of credit. This includes many of the ethical people already discussed here. Payday and other predatory lenders don’t care about your story; they care about your vulnerability. Their goal isn’t to help you finance your life needs, but rather to trap you in a never-ending cycle of perpetual debt.
Many people rely on these predatory lenders to finance their automobile purchases, and it’s not difficult to understand why. According to Statistics Canada, over 15 million Canadians drive themselves to work on a daily basis. You need your car in order to earn your living and accomplish your day-to-day tasks. This need does not change when your credit score does, but you don’t need to fall back on scam artists to be able to get to work and live your life.
Ride Time works around-the-clock to help you get the lowest interest rates available in terms that you can handle. We deal with over fifteen lenders and go above and beyond that our customers get the best rate from them. We even have access to lenders to which very few other dealers have, and can help you get the approval in your own name if you’ve had a job for 3 months, make at least $1500/month before deductions, and own a valid driver’s license.
So don’t beat yourself up about a couple issues on your credit report, and never feel trapped or compelled to offer yourself up to unethical predatory lenders. We understand how important your automotive access is to critical parts of your life, and we don’t believe you should be permanently limited by understandable oversights in your past.
The predatory lenders of the world want to trap you in perpetual debt for one or two missed payments in your past. They make their money on grossly unethical and, at times, illegal loan terms and conditions. That’s why to us, it’s not just about helping you get your used car financed; it’s about helping you preserve the best parts of your life and protecting you against the seedier elements of finance. Let us help you figure out the better side of used car finance.