If you need to apply for a car loan but with bad credit, it’s important to know how to negotiate for a good deal. Just because your credit score needs improvement does not mean you should settle for the first offer.

In this article, we present practical tips on how you can negotiate a bad credit car loan.

Check your personal credit report.

This is an important step. You need to know exactly where you stand with your credit rating before you try to negotiate a bad credit car loan with a lender or  a dealer. Don’t let anyone tell you what your credit rating is. Get to know your real score for yourself.

See to it that there are no errors or misinformation in your report which can be pulling down your score. If you have not yet ordered your free copy for this year, you can make the request from AnnualCreditReport.com.

Compare auto loan rates.

You can get free quotes online but double check the reputation of the lender. See to it that you are not being asked to enter too many information in exchange for a free loan quote. Comparing quotes will give you a better idea about the average rate offered in the market. However, keep in mind that quotations are not final. The actual rate may increase or decrease depending on your qualifications as a borrower. Also, you might be able to get a lower rate through negotiation.

Watch out for predatory auto loan dealers.

Some auto loan dealers offer bad credit financing to increase their monthly sales quota. However, customers must know how to avoid dealers who may try to take advantage of the situation by offering quick financing but with excessive rates and fees. Before considering auto loan dealers, check out banks and credit unions first.

Check out Credit Unions.

When in search for bad credit car loans, it’s always a good idea to see programs offered by credit unions. These organizations are especially created to give consumers better financing options. Hence, credit unions are most likely to offer lower interest rates than commercial lenders even for people who are credit challenged.

Come prepared.

Do your research first before meeting with a potential bad credit lender. Bring your notes and let your lender see that you have done your homework. Bring a copy of your personal credit report to show your lender that you know where you stand. Explain the circumstances that lead you to bad credit and inform your lender the positive steps you’ve already done to regain good credit. This will help convince a potential lender to give you a good offer despite having bad credit.