Buying a car from a "we finance place"?

Question

If I were to go out and get a car from a buy here finance here place, will my credit be affected if I were to stop paying them? People have been telling me that it doesn't affect your credit if you stop. j/w.

Answer 1

Anytime you apply for credit or finance something, it affects your credit. If you stop paying, then the late or non-existent payments will be reported to the credit bureaus. This will trash your credit rating.

If the company itself is financing the transaction, you can bet they report to the credit bureaus. They probably also have a big in-house collection agency and lots of collection lawyers. These companies cater to people who often don't make the payments. They sue them, get a quickie judgement against them, and then garnish their wages with fees and interest built in. They actually take more of your money if you stop paying.

Or, in the case of cars, they repossess the car and you lose any money you already paid them. Then they resell the car to the next guy....who defaults, they repossess the car, keep his payments, and resell it to the next guy.

Also, those "we finance" places charge enormous amounts of interest. In general, those places are a bad idea. Avoid them if possible.

Answer 2

Not a real estate question.

But, since you asked. Not all of those dealers report your history to the credit reporting agencies. If they don't, it won't help or hurt your credit.

Answer 3

Depends if they file a judgement or report to credit agencies.