When it comes to buying a car, auto loans are a reality for many Americans.
Time spent wheeling and dealing and over the list price can be very unpleasant when buying a new or used car. Even though it is not the most enjoyable activity, diligently searching for both a good car and a cheap auto loan can make a big difference in the long run. Unfortunately, cheap car loans can be very challenging to obtain for individuals with poor credit and wages paid in cash or otherwise under the table.
Many people know the common sense tricks to keeping credit scores high.
Things like paying a mortgage, credit card bills, or making regular auto loan payments are always good for your credit score. The length of your credit history can make a difference, too. One of the biggest issues facing young people trying to get an auto loan is their lack of credit. Additionally, job security is also important to lenders. If someone makes a habit of switching jobs frequently or gets paid in cash, this can tell lenders that they are not able to hold down a steady job and thus will not have a steady income to repay the loan.
Under the table pay, a bad thing?
People are often not aware that getting paid under the table not only makes tax season a headache, but it also makes proof of wages almost impossible. Despite the benefits of receiving payment in cash without a paycheck, withholdings, W-2 or 1099, under the table income is unrecorded and therefore unable to be proven. More than anything, lenders want to see financially responsible behavior and a steady income. If you are paid in an unrecorded manner, lenders will not be able to see your employment or your income. This can be incredibly damaging to the process of securing a loan. With a bad credit score (or none at all), getting paid under the table, even partially, can make a big difference when trying to get a bad credit auto loan.
Reality check: You need to look good to your lenders financially
When it comes to looking for auto loans, especially bad credit auto loans, there is a lot at stake. Interest rates can be exceptionally high, especially for people who pose a threat, whether legitimately or simply on paper, to a lender. Many people are unaware of the effects getting paid under the table can have on one’s credit score and one’s ability to obtain an auto loan. In order to improve your credit score and increase your chances of obtaining a great car loan at a competitive interest rate, pay your bills on time and only accept payment above the table. Auto loans may seem of little consequence to some people but accepting a loan with a high interest rate could cost you more than you know.