Applying for a car loan can be a nerve-wracking experience for many, especially those of us with a less than stellar credit score. While the situation might seem hopeless, there are ways even people with a sub-par credit score can secure financing for a new car. Here are a few tips on how to get a car loan with poor credit.
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Don’t Make Assumptions
First of all, is your credit that bad really? People often assume that they have a horrible credit score because of a few bills missed in the past. But, credit histories do get revised and some charges may have been removed from your credit history. In other cases, your credit history may have faulty information that may be tarnishing your image.
If that’s the case, don’t be afraid to file a complaint and ask for a revision. The top three credit bureaus will allow you to get a free copy of your credit report for revision. If you notice any errors, you’ll have to contact them either through an online form or by letter. They will have a limited time to send you a response and make the proper corrections if need be.
You should also note that your credit score alone is not what will determine whether you will get the loan or not. Two people with the exact same score may not be equally eligible. For instance, a person with a low credit score, but with an extensive credit history, may be privileged over someone with the same score, but with no credit history.
Look for Options
Don’t be afraid to look outside the box if you’re looking for an auto loan. Instead of going to lenders one by one, you should start looking for multiple lenders through services like Apply and Buy. These services will usually put you through a pre-approval process and connect you with a variety of lenders. You will then have the possibility to compare different interest rates and see which one is better for you. The more options you have at your disposition, the more chances you’ll have of getting a preferential rate.
Find a Cooperative Dealer
You should also look for a dealer that is favorable to your type of credit situation. Usually, these dealerships will make it very clear that they will work with people with low or no credit. However, they will usually charge higher fees.
On the other hand, if you have no other choice, these could be a lifesaver. Also, many offer very flexible payment options. However, be careful and read the blueprint so you don’t get swindled into paying more than a car is worth. Also, make sure that you look at provisions for default or late payments.
Conclusion
Getting a car loan with poor or no credit can be a challenge at first, but it’s still possible. The first step is to verify your credit score and see if you are eligible for a regular car loan. Make sure that you look at as many lending options as possible and only consider getting a bad credit dealership loan as a last resort.
About Carson Derrow
I like how you say that you can find dealerships that are understanding when you have bad credit and will work with you. My husband and I need to get a new car because his has broken down completely. We’ve got bad credit and not enough money to do it without a loan. Your tips should really help us find an auto loan for people like us.