Notes

CPS Help People Categorized as Credit Invisible
Millions of U.S. residents have credit scores in the fair to poor range. In the lending industry, they are categorized as subprime borrowers. Auto Loan have never built a credit history. Lenders consider them to be credit invisible, as their financial trustworthiness cannot be evaluated. When these men and women want to finance an automobile purchase, they may need to buy from a dealership partnering with Consumer Portfolio Services. This lending company accepts applications from subprime borrowers and those who are credit invisible.

Decades ago, it was significantly more common for people to never buy anything on credit except for a home with a mortgage. This is more unusual today with the proliferation of credit cards from major financial services companies as well as chain stores. Many individuals, however, still shy away from obtaining any of these cards. They've heard about how consumers are tempted to charge more than they can pay each month and the trouble that sometimes leads to. Others cannot be approved because their income is too low or sporadic.

About 10% of U.S. adults are credit invisible, according to the Consumer Financial Protection Bureau (CFPB). Although that is a relatively low percentage, it still means some 26 million American adults have no credit rating with any of the major reporting bureaus. Without a report from at least one of the bureaus, consumers can have substantial difficulty obtaining a Vehicle Loan . Including a co-signer is one option, but not everyone has a person willing to help out.

The CFPB reports that residents of low-income neighborhoods are much more likely to be credit invisible. They don't qualify for traditional financial products like credit cards and bank loans. When they need to borrow money, they might turn to a payday lender or installment loan provider. Many of those companies do not report to the bureaus.

Even when these people move into a higher income bracket, being approved for traditional loans and credit cards can still be a problem. One way to build credit is to apply for an automobile loan through a dealership that works with these consumers.

Finding a car dealership providing financing for people with problem credit or no rating can be difficult. Yet many dealers want to sell vehicles to these customers to move inventory more rapidly. Partnering with a lending company willing to accept those applicants is an advantage for everyone.
Read More: https://www.storeboard.com/blogs/business/consumer-portfolio-services/5509980