Credit
Understanding Credit
Your credit plays an important role in how lenders make financing decisions. In Canada, your credit score reflects how you've managed credit in the past and helps determine what type of financing you qualify for.
Lenders generally categorize borrowers into two groups:
Prime Credit
Clients with strong credit history, steady income, and higher credit scores. They typically qualify for lower interest rates and more flexible loan terms.
Sub-Prime Credit
Clients who may have limited credit history, past payment challenges, or a lower score. Approval is still very possible it just means finding the right lender and structure for your situation.
At V Approved, we specialize in both prime and sub-prime financing, ensuring everyone has access to fair, transparent, and personalized vehicle finance solutions.
The 5 C's of Credit
When reviewing your application, lenders evaluate what's known as the 5 C's of Credit to make a decision:
Character
Your credit history and how responsibly you've handled payments in the past.
Capacity
Your ability to repay the loan based on your income and existing financial obligations.
Capital
Any savings, trade-ins, or down payments that show financial stability.
Collateral
The vehicle being financed, which acts as security for the loan.
Conditions
Factors like employment stability, loan terms, and overall economic environment.
Understanding these factors helps you see what lenders look for and how you can strengthen your financial profile moving forward.
Rebuilding Your Credit
If you've faced credit challenges in the past, financing a vehicle can be one of the most effective ways to rebuild your credit. By making consistent, on-time payments through your auto loan, you demonstrate reliability and financial responsibility two key factors that improve your credit score over time.
At V Approved, we work with lenders who specialize in credit rebuilding programs. Our goal is not only to get you driving but also to help you move toward a stronger financial future one payment at a time.