An automobile is a major investment and for many individuals, it can merely be possible with the aid of a loan provider. If obtaining a car is included in your plans for the following year, you certainly should search in to your credit report to see your position.

There is no secret that the best auto loan deals are restricted to people who have excellent credit.

Lenders are going to give their finest offers to customers who have proven their credit worthiness. If you have a low score, it may be a serious drawback when attempting to get financing like a car loan.

Does this mean you should forget about your plans to buy a car if you have bad credit? Not necessarily! However, there are some things that you need to consider if you need a car loan but with bad credit.

Check out the following pointers:

Improve your credit.

You can do something to improve your credit score beginning today up until the first quarter of 2012. You might need to work on credit improvement for the next few months to achieve a suitable rating. Of course, this would depend on how bad your current score is.

Order the latest copy of your credit report from the three credit bureaus so you know exactly where you stand. If there are errors in your report, keep in mind that these can be fixed by sending a letter to the bureau that issued your report.

Disputing credit report errors can take up to 30 days because the bureau will conduct its own investigation. If your dispute is valid, the errors will be corrected and you will see a considerable improvement in your score.

If you can wait a bit longer until your credit score increases, you will be in a much better position to acquire car financing. If you can delay your car purchase for another six months as you work on repairing bad credit, you will be able to qualify for a lower rate.

Buy an affordable car.

What kind of car are you planning to purchase? If you have bad credit, your options will be limited. You can do your research, compare lenders, and try to negotiate but the offers will not be as good as the deals available to customers with good credit.

If you must buy a car at this time, it’s only smart that you choose an affordable car that will serve your purpose. Obviously, this is not the time to invest on your dream car. You can do that once you have regained a good credit score through timely submission of your car loan payments.

Refinance your bad credit auto loan.

You can get approved for a car loan by seeking out lenders that provide special car financing programs for people who are credit challenged. After acquiring a loan, submit your monthly payments consistently and make sure that your payments are reported to the major credit bureaus.

After six months, check your report to see your progress.

If your credit rating has significantly improved, refinance your bad credit car loan to enjoy a lower rate. You should refinance your car loan as soon as your credit improves. Remember, car loans are often accompanied with a short repayment period and refinancing is just like taking out a second loan. If you wait for another year or two, you might as well finish the term rather than go back from scratch.