Finance Advice

Tips On Getting A Car Loan With Bad Credit

Just because you have bad credit, it does not mean that you do not deserve certain joys in life, like purchasing a new car. You may have made mistakes in the past when it comes to credit, but you still deserve the chance to drive the car of your dreams. The problem many people have when they have bad credit is getting a loan for the vehicle.

When you are considering buying a car with bad credit, it is important to be realistic about the car that you can afford. If you have a credit score of less than 620, you may be considered sub-prime. If this is the case, you will have a much higher interest rate. Knowing this, you should shop for a less expensive car since the payments will be much higher due to interest. The last thing that you want to do is buy a car that is too expensive and be late on payments or have it repossessed. This can result in your credit being damaged even more.

Before you begin shopping for a car you should obtain a copy of your credit report. While credit bureaus are trying to prevent mistakes on credit reports, they do still happen. It is important to check your credit report and make sure that everything on the report is accurate. Your score may be lower than it should be due to erroneous information. If you go through your credit report and see a charge that you disagree with, it is important to contact the correct party to have the issue resolved. Making sure your credit report is correct can save you a great deal of money in finance charges. There are several sites on the internet where you can get a free copy of your credit report.

Not only is it important to see what is on your credit report, it is also wise to always know your credit score when shopping for a car. When you do, you can go to the dealership with the confidence of knowing your status before walking in. It is also a good idea to know because you may be at the cusp of getting a better interest rate if your credit scores goes up just a bit. If this is the case, you could put off purchasing a new car until you can get your credit score up a bit. This can save you a great deal of money in the long run.

While you cannot change to negative accounts on your credit report, keeping your credit clean now can help you to get a car loan when you have bad credit. Lenders will look at your credit score but they will also look at your recent credit activity. If you have made all of your payments on time for a year and a half, many lenders will take that into consideration.

When most car shoppers choose a lender, they typically go to the dealership’s auto financing department. It just seems like it is the easiest way. They want you to buy a car from them and make the extra profit by financing you. This can end up costing you more money. When you have bad credit, it is wise to shop around before you go to the dealership. There are plenty of poor credit lenders out there, many of which may have a lower finance charge than the dealership does. If you shop around before you go to the dealership, you can compare their interest rate with the other rates that you obtained. In doing so, you are guaranteed to get the best deal.

While getting a car loan with bad credit can be difficult, it is not impossible. It is just important to be fully informed before you sign on the dotted line with any finance company.