Are you in the market for a motorcycle but have bad credit and need a high-risk motorcycle loan? Well, do not worry, the purpose of this article is to give you everything you need to know about being approved for a high-risk motorcycle loan.
First, you need to understand how motorcycle lenders can be classified as high risk. On average, when a motorcycle lender wants to approve any motorcycle financing, they have a much higher break in credit score than an auto lender. This is if you have good or bad credit.
So with that said, an auto lender can approve a FICO credit score of 610 which is not a high risk but a motorcycle lender would likely classify a FICO credit score of 610 as a high-risk motorcycle loan and may not offer an approval on it.
There are two reasons for this:
With all new motorcycle riders entering the industry there is a major event of some or minor damage to many motorcycles, which means that a lower amount per unit as a lender gets when they take a motorcycle for a customer who chooses to get Bad credit over paying for their motorcycle loans. The damage can be from the recycling agency or the actual owner, but the simple fact is that motorcycles get much less at recurring auctions than cars.
This simple fact is a reason why good and bad credit motor loans are offered at much higher interest rates than a car and have an overall lower approval percentage compared to cars.
Okay, now that you have a background in how a motorcycle lender sees a motorcycle loan, lets see how you can be approved for a high-risk motorcycle loan.
Step 1 is to really understand your credit report and credit score. Certainly, if you are looking for high-risk motorcycle financing, you have probably had some credit problems earlier. But you never know how these credit problems appeared on your credit report until you get a copy of it.
Take a look and make sure everything reported on your credit report is actually true. See the 1000s of people every year just as you find that creditors made mistakes in their credit report, which negativity affected their credit points. If your FICO score shows 610, but there is an error in your credit report, you can easily raise your FICO credit score to 625 or higher by fixing the error. Always fill in your credit information before submitting a high-risk loan application.
Step two is to clean up your credit card debt. I know you probably think I can not do it, but it can make a big difference when it comes to helping you get approved for high-risk motorcycle financing. See motorcycle lenders do not like to see your personal credit cards maxed out. Therefore, before submitting your application for motorcycle financing, you should try to pay off your credit card debt. Even if you have to do it in the short term, it can help you get well.
For example, if you have a 610 FICO credit score, you will probably be denied if you have all your credit cards maxed out. But if you can reduce your credit card debt by 50%, youre much better off getting approved for a high-risk motorcycle loan. This is a simple concept, but you will be surprised at how many motorcycle buyers fail to do this and never be approved.
Step three and last step is to finally submit your motorcycle loan application. There are many lenders specializing in high-risk motorcycle loans. I recommend switching 2 or 3 online motorcycle lenders and then moving to your local credit unions or financing provided by the reseller like Suzuki Finance, Honda Financing, Kawasaki Credit Card or Polaris Star Card.