How To Get Truck Financing With Bad Credit, And What Not To Do
By Titan Credit Solutions 1.04.2020
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Getting financing to buy a truck can seem impossible. They want a ton of money down, astronomical interest rates, or string you along for weeks only to deny you and not even give you a chance at all.
Meanwhile, you've been driving with a perfect record for years, making all the money for the boss, and all you want to do is get a truck you'll enjoy driving down the road while making some good money at the same time.
It's not your fault. Commercial truck financing is perhaps the most difficult financing to get. There is a very high repossession rate. Not to mention job hopping is extremely high due to a low driver satisfaction rate. This means the lenders make it very difficult to get started and they aren't afraid to charge enough to offset their risk.
After reviewing thousands of transactions here are the top things you need to know, what you need to do, and what you shouldn't do so you can finally get the truck you want at a price you can afford.
Here's how to beat the lenders for good.
1. Get Your Cash Flow Right
Almost every lender is going to review your cash flow. This means your bank statements, pay stubs, or even tax returns. Have these documents readily accessible. Commercial financing can take a week to go through underwriting so the faster you get these items upfront, the faster you will get an answer.
Additionally, they are looking for cash flow. They need to see you can afford your loan. This means you want to have large ending balances in your account each month after paying all bills. They don't want to see a couple hundred bucks in your account every month as that's a red flag that you won't be able to pay the loan.
Lastly, do not ever let any account overdraft. Any overdrafts will show on a bank statement and can immediately disqualify you from the loan.
Additionally, they are looking for cash flow. They need to see you can afford your loan. This means you want to have large ending balances in your account each month after paying all bills. They don't want to see a couple hundred bucks in your account every month as that's a red flag that you won't be able to pay the loan.
Lastly, do not ever let any account overdraft. Any overdrafts will show on a bank statement and can immediately disqualify you from the loan.
2. Open An LLC Or INC
Since commercial financing is a business loan you will drastically improve your loan terms by having an active business. Don't just use a sole proprietor as some lenders won't accept this. Spend the couple hundred bucks, do it right, and set up an LLC or INC.
Get your EIN and open a business bank account in the business's name. Run all income through this account. Keep as much money in that account at the end of each month as possible. Lenders will deny you if your ending balances are too low so pay close attention to this before you move money around or make purchases.
Get your EIN and open a business bank account in the business's name. Run all income through this account. Keep as much money in that account at the end of each month as possible. Lenders will deny you if your ending balances are too low so pay close attention to this before you move money around or make purchases.
3. Get Your Credit Right
This is the most important step when getting a commercial truck loan. Don't just go out and start applying for loans without checking your credit first. And I don't mean Credit Karma. The score they report is not even close to what the lender will pull, plus there's a lot more to it than that. You need a real credit analysis.
Get a full credit analysis that reviews all your credit reports. Over 70% of people have inaccuracies and almost anything can be removed off your credit, even repossessions and bankruptcies. Removing these items and doing other simple things like maximizing your credit utilization can boost your score by 25, 50, 75, or even 150 points in a matter of a couple of months.
Boosting your credit score to 600, 650, or even 700 will drastically change the loan terms including your interest rate, what kind of truck you can get, and how much they require you to put down. You can even get approved for zero down with as little as a 650 score with some lenders.
Although you may be able to do this on your own we recommend hiring a professional to do this for you to ensure it gets done right and faster than you can do it yourself. There are a ton of companies out there that are only out to take your money for months with no real results. That's why we linked the most reputable credit repair company with proven results below.
They will give you a free credit analysis, fix any items on your report, and help you get your credit right in as little as 30-90 days. They also guarantee their service so if you don't get results you get your money back. Plus their cost is less than a CB radio per month so it's well worth saving thousands in money upfront and on the lifetime of your loan.
Get a full credit analysis that reviews all your credit reports. Over 70% of people have inaccuracies and almost anything can be removed off your credit, even repossessions and bankruptcies. Removing these items and doing other simple things like maximizing your credit utilization can boost your score by 25, 50, 75, or even 150 points in a matter of a couple of months.
Boosting your credit score to 600, 650, or even 700 will drastically change the loan terms including your interest rate, what kind of truck you can get, and how much they require you to put down. You can even get approved for zero down with as little as a 650 score with some lenders.
Although you may be able to do this on your own we recommend hiring a professional to do this for you to ensure it gets done right and faster than you can do it yourself. There are a ton of companies out there that are only out to take your money for months with no real results. That's why we linked the most reputable credit repair company with proven results below.
They will give you a free credit analysis, fix any items on your report, and help you get your credit right in as little as 30-90 days. They also guarantee their service so if you don't get results you get your money back. Plus their cost is less than a CB radio per month so it's well worth saving thousands in money upfront and on the lifetime of your loan.