How to Get a Car Loan with Bad Credit
Having poor credit history can be a real obstacle especially when applying for financing. For instance, if you’re planning to buy a car soon, finding an affordable car loan deal will be more difficult if you have an undesirable credit score. Does this mean you can never get approved for a car loan if you have bad credit?
The good news is that it is possible to get a car loan even with bad credit. In fact, many lending companies and some reputable car dealerships offer financing especially for people who are credit challenged. Through research and preparation, you should be able to get the financing you need.
Consider the following tips:
Check your report and clean up the errors. Errors in your credit report will pull down your score but you can have these corrected by sending a letter to the bureau that issued your report. Upon receiving your letter, the bureau will conduct an investigation which can take up to 30 days.
If your dispute is valid, the errors will be removed or corrected and the bureau will send an updated copy of your report. This step can instantly raise your poor credit score which is why it is recommended that you check your report at least two months before applying for a loan or any type of credit.
Look for lenders who specialize in bad credit loans. As mentioned in the beginning of this post, there are lenders who are willing to extend car financing to customers with bad credit. However, since not all lending companies accept people with imperfect credit, you need to spend some time doing research.
The internet is a great tool to find bad credit car loan lenders. Thus, you don’t need to make a lot of calls or visit each lender’s location just to make inquiries. You can read reviews online or check out a reliable car loan comparison website. After narrowing down your choices, you can check out the prospective lending company’s website and request for a free car loan quote.
Avoid multiple car loan applications. Do not submit multiple applications to different lending companies at the same time. This will be bad for your credit since each inquiry made by a lender can pull down a few points from your score. Prospective lenders who inquire your credit report will be able to see all applications you submitted to other companies. A lender may feel doubtful about your real purpose and may refuse your application.
Negotiate for a better deal. Even if you have bad credit, you still deserve to be treated fairly and with dignity. The car loan quotes you will get are just estimates, not the exact deal. You might still be able to get approved for a lower rate if you make a request.
Meet a prospective lender in person and explain the circumstances that lead you to bad credit. If these circumstances were beyond your control, a lender is more likely to give you consideration especially if you have done positive steps to improve your credit score.
About the Author
Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing personal loans for bad credit and bad credit credit card.
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I knew I had bad credit but thought my car would hold out till I could get my credit straightened out. Wrong! My car died. I needed to get a “new” used car and I just kept running into brick walls, getting turned down for car loans. I went to several dealers and each dealer did a credit inquiry which I didn’t find out was harmful till I read your article. Anyway, I finally found a bad credit car loan online, totally reputable, they’re one of the sponsors of a Nascar team, I just have to pay higher interest. But hopefully in a year or so I can refinance my loan to a lower rate. I’m going to read about how I can improve my credit in some of your other articles.