Latest Stimulus Checks and a Bad Credit Borrower's Benefits

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Bethany Hickey is is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 


, Content Manager - March 2, 2021

The third round of stimulus checks has passed, and some states are rolling out their own plans. This extra cash could lead to more lending, investment, and credit repair opportunities for bad credit borrowers.

New Stimulus Checks for Californians

California is issuing its own Golden State Stimulus checks. Like the federal stimulus checks, this Golden State Stimulus is based on tax returns.

Governor Gavin Newsom states, “Those who have been left behind in that federal stimulus, California’s not going to leave you behind.”

According to CalMatters.org, the state plans to send out $3.8 billion in stimulus payments as part of a larger $7.6 billion economic stimulus package, which Governor Gavin Newsome signed on Feb. 23. After qualifying Californians file their tax returns, it determines the timing of the stimulus payment.

The Golden State Stimulus is a one-time payment of $600 to those who qualify, including some extra help for undocumented works that were/are ineligible for the federal stimulus checks. Some undocumented workers may qualify for a second state stimulus check if they made less than $30,000 in 2020 and filed taxes. The program also includes relief for many small businesses.

Reportedly, an estimated 5.7 million checks are expected to roll out to Californians in the lower income brackets, families enrolled in CalWORKS, disabled individuals, the elderly, and those enrolled in California’s Cash Assistance Program for Immigrants.

If you’re a qualifying California resident and you’ve already submitted your 2020 tax returns and made less than $30,000 in 2020, that check may be coming soon.

For those who haven’t filed their 2020 tax returns yet, you should expect the check four to five weeks after you filed if you have a direct deposit. If you don’t have direct deposit, then you should see your Golden State Stimulus check around six to seven weeks after filing.

Updates on Federal Stimulus Packages

The third round of federal stimulus checks passed in March 2021, and many people have already received them. Qualifying Americans are set to receive up to $1,400, and married couples are set to receive $2,800. The bill also includes raising unemployment benefits, boosting funds for small businesses, schools, cities, and states. It also offers an additional benefit to families with children.

The IRS has already received 55 million tax returns since many Americans are looking to file as quickly as possible to qualify for this round of stimulus checks. Since the 2020 stimulus checks were largely based on many American’s 2019 tax returns, those who made more than the limit, even if they lost work, were left out of the stimulus program due to their prior high income. To keep up with the demand for tax returns, the IRS has pushed back the filing deadline to May 17, 2021.

How Can a Stimulus Check Help Bad Credit?

An influx of cash is normally a great thing for anyone, but it can be especially helpful to those struggling with credit issues. When a bad credit borrower applies for new credit, it’s very likely they need to meet a down payment requirement.

Car loans are no exception to this rule. Most bad credit auto lenders, also called subprime lenders, require at least $1,000 or 10% of the vehicle’s selling price as a down payment requirement.

If you qualify for any of the latest stimulus packages, either federal or through your state, these windfalls of cash could help you meet or exceed the down payment requirement of a lender. Once you qualify for financing, your on-time payments on the car loan can do wonders for your credit score.

Applying for a car loan isn’t the only way cash can help you improve your credit score. Paying down your credit card balances to below 30% is a good move too.

Applying for other types of credit, such as a secured credit card, might work as well. Secured credit cards are backed by a deposit, and if you have extra cash on hand, you could meet that deposit requirement and get your hands on a secured credit card. These credit cards are reported as regular revolving credit, which could build up a nice credit history and increase your credit mix.

Ready to Improve Your Credit With an Auto Loan?

To build credit, creating a good, long-standing payment history is a great way to go about it. Payment history is the single most important aspect of your credit score. Without anything positive or active on your credit reports, you run the risk of being considered a bad credit or no credit borrower – making it tough to qualify for new credit when you need it.

At CarsDirect, we understand how tough it can be to find lenders that can assist with credit challenges. That’s why we’ve created a network of dealerships that are signed up with subprime lenders, and we’ve been matching consumers all over the country to dealers for the last 20 years. Get on the road to an auto loan today by filling out our free car loan request form. We’ll look for a dealership in your local area with no obligation.

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, Content Manager

Bethany Hickey is is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 


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