Are you in the market for a new set of wheels but need help securing a car loan due to less-than-stellar credit? Well, fear not, my friend, because “Buy Here Pay Here” (BHPH) dealerships may be the answer to your automotive prayers. But before you head out to the nearest BHPH dealership with dollar signs in your eyes, let’s talk with buy here pay here low down payment about how these types of dealerships work and whether or not they can help you build your credit.
First, BHPH dealerships operate a bit differently than traditional car dealerships. Instead of working with outside lenders to secure financing for their customers, BHPH dealerships provide in-house financing. This means that they are acting as the lender themselves. This can be a significant advantage for those who have difficulty getting approved for a car loan through a traditional lender.
But here’s the catch: just because a BHPH dealership is willing to provide you with financing doesn’t mean it will necessarily help you build your credit. It could do the opposite. Many BHPH dealerships don’t report payments to the credit bureaus, which means that even if you make all of your payments on time and on a whole, it will only positively impact your credit score.
On the other hand, many BHPH dealerships report to credit bureaus and positively impact credit scores when payments are made on time; this is a good option if you are rebuilding credit or have no credit.
Another thing to remember is that BHPH dealerships often charge much higher interest rates than traditional lenders, so it’s essential to make sure you can afford the monthly payments before you take on the loan.
So, can a BHPH dealership help you build your credit? The answer is it depends. If the dealership reports payments to the credit bureaus and you make all of your payments on time and on a whole, it can.