Buy-here-pay-here (BHPH) car lots do not help your credit. In general, the transactions are not reported to the major credit reporting agencies unless the vehicle is repossessed.
Bad Credit Car Loans That Do Help Your Credit
There are dealerships out there that do report to the major agencies. The ones that do have a finance arm that supports the loan. This means that they are not actually a BHPH, but the dealership has a finance office that work with a captive finance company, an array of lending companies, or both. You may still be able to make weekly payments, but the car is financed by a third-party bank, credit union, or finance company instead of on traditional BHPH terms. This is the type of loan that can help you build or re-establish your credit.
Improving Your Credit Prior to Application
If you want to improve your credit, you can take a few easy steps. Start by going to www.annualcreditreport.com to request your credit reports from the three major reporting agencies. You may find errors or collection accounts that you had forgotten about. Clearing up either could improve your credit score. Whether you have no credit or bad credit, obtaining a credit card will help your score, as long as the card is used responsibly. If you are denied for a more traditional card, then apply for a secured credit card. The key is to obtain a card, make any payments on time, and keep your balance under twenty-five percent of your credit limit. Following those few easy tips can improve your score enough that you can avoid the need for a BHPH dealership.