Does Financing Through “Buy Here, Pay Here” Affect Your Credit?

The buy here pay-here (BHPH) refers to a car financing method in which the car dealership serves as the lender. This means that rather than the consumer arranging financing through a bank or other financial institution, the dealership will sell a customer a vehicle and then permit them to make payments at the dealership – visit us.

Many people have one question about BHPH financing: whether it goes on their credit. The answer is that it can, but it depends on the specific terms of the financing agreement and how the dealership reports the payments to the credit bureaus.

In some cases, the dealership may choose to report the payments to the credit bureaus, meaning the customer’s payment history will be reflected on their credit report. This can be beneficial for the customer, as making timely loan payments can help improve their credit score.

However, it’s important to note that not all dealerships will report BHPH financing to the credit bureaus. In these cases, the payments will not be reflected on the customer’s credit report and, therefore, will not impact their credit score.

It’s also worth noting that even if the dealership does report the payments to the credit bureaus, the impact on the customer’s credit score may not be as significant as it would be with a traditional loan. This is because the interest rates on BHPH financing are often much higher than those offered by conventional lenders, which means that the overall cost of the loan will be higher.

In summary, whether or not BHPH financing goes on a customer’s credit depends on the specific terms of the financing agreement and how the dealership reports the payments to the credit bureaus. Therefore, it’s essential for the customer to be aware of this and to carefully consider the potential impact on their credit score before entering into a BHPH financing agreement.