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Financing Tips For The Credit Challenged

Semi trucks are extremely expensive pieces of equipment, regardless if they're new or used. However, a good truck can make an independent owner-operator a great deal of money over its lifetime. While the potential is there, it can be difficult for someone with bad credit to obtain semi truck financing through a traditional lender such as a bank, or credit union. If you have less-than-perfect credit and you want to buy a good truck to establish yourself as a trucking professional, here are some tips that will help you get the financing you need.

Save Some Money

No matter where you obtain a loan from to buy a semi-truck, you'll likely need a substantial down payment. This can range anywhere from 10% of the purchase price to as high as 50%, depending upon your specific credit history. In some cases, you may be able to use other collateral, such as machinery, heavy equipment, or a home to offset the money down requirement. However, if you fail to make your payments, the finance company will take possession of that collateral. If you don't have an adequate amount for a down payment, your chances of being financed are very slim.

Finance Killers

A bad credit score can be caused by a number of scenarios, from lengthy unemployment to illness, or even a divorce. While these things are not really an excuse for not paying your bills on time, they're not necessarily deal breakers. However, unpaid child support, a recent vehicle repossession, or a current (not discharged) bankruptcy are. If you've got any of these things on your record, it's imperative that you take care of them before you apply for financing. Otherwise, you'll be rejected time and again by even the most liberal finance companies.

Consider a Co-Signer

Perhaps the easiest way to get around a bad credit score when looking for semi-truck financing is to get a co-signer to help you. You can't get just anybody to do this, however. Any co-signer on a big rig loan has to have good credit and a valid commercial driver's license (CDL). So, don't bother trying to get your mom, brother, or aunt to co-sign for you, unless they can fulfill these two criteria. Instead, find a trucker friend, or trusted colleague that is willing to help you out. Be very aware, however, that this type of arrangement can strain even the closest of relationships, so tread lightly and be very careful.

The truth is, even with bad credit, you can finance a new, or used semi-truck, as long as you are prepared. Put some money aside for a down payment, take care of nagging financial issues such as back child support, and if need be, find a qualified co-signer. Then, make sure you make your payments on time, every time, and soon, you'll find your credit score, and your financial life have improved. If you're ready to become an independent owner-operator, and you're looking for a good truck, contact us. We have an exceptional inventory of well-maintained trucks to suit any budget.