It is possible to get a car loan with a judgment on your credit report, but it will be difficult. You have two major obstacles to overcome:
- Any balance still owed on the judgment.
- Your low credit score from the judgment.
Credit Score Impact of a Judgment
Once a judgment has been granted against you it will appear on your credit report for at least seven years from the day you first went delinquent on the account. Immediately after it appears on your credit report, your score will drop by quite a bit. How much depends on how high your score was to begin with. A score over 680 will lose at least 100 points, but if your score was only 540 to start, it will only drop 20-30 points. This is typical. The lower your score already is, the less impact such events have on it. After all, your score can only go so low.
Balance Still Owed
The next hurdle is any balance remaining. Most lenders are uncomfortable saddling you with a new balance when you have one still to be paid. There is only so much that can be squeezed out of your income each month. With a judgment, traditional lenders will not offer you a loan. The few credit unions that are willing to deal with low credit scores and a judgment are going to require that the amount owed be paid in full before they will offer a new loan.
BHPH and Other Options
If you have not been able to pay the judgment in full, but need a car now, you have the option of a buy-here-pay-here dealership. This really should be your last resort. These businesses sell cars to consumers at the lowest ends of the credit spectrum, and they don’t do credit checks. The problem is, welcoming such consumers comes at a price: very high interest rates, very prohibitive lending terms, and often the installation of GPS or ignition kill-switches to aid in repossession, it being so common.
As an alternative, you can work with an approval service such as ours. When you apply online, we do everything in our power to place your application in the helping hands of a dealer or lender who wants to grant you credit. In some instances, these lenders are willing to look at the age of the judgment and offer you a second chance auto loan. Be sure to research the lender before you finalize your loan. Check with the Better Business Bureau and the Consumer Financial Protection Bureau to see if there are an issues that you need to be aware of.