How to Buy a Car with Bad Credit
May 19, 2008
You really need a new car, but you know you have bad credit. You don’t really think there is much use in trying to get a car loan, so you haven’t even tried. You may be interested to know that even though you may have bad credit, you can still get an auto loan… maybe not right away, but sooner than you might think. First, you have some work to do.
How is your credit score? Before doing anything else, get a copy of your credit score and credit report to see where you stand. Your credit may be better than you think. If your credit score is 680 or more, you will qualify for very good interest rates. If your credit score is below 680, you can still get a loan, but you will find that there are not as many lenders set up to work with people with bad credit.
You won’t get a low interest rate with bad credit auto loan, but you can get a fairly reasonable rate, depending on which lender you go with. That is why you want to take the time to do your homework and check out as many lenders who work with people like you as possible. This type of lender is called a high risk lender, and they are in business to do everything possible to get you an auto loan – the best one possible, depending on your financial situation.
Once you have found a few lenders like this, get loan quotes from them all. This will help you to see not only which lender will give you the best interest rate, but will also allow you to make sure that the company is a reputable one. There are some loan companies out there who know that people with bad credit are a little more desperate to get a car loan than most, and have the audacity to prey on them for more money than they should.
If your credit score is very much below 680, you need to work on your credit before applying. If you have any late payments due on your credit cards, catch up with them, then make sure to never be late with a payment again. Pay as much above the minimum payment due as you can. If your credit cards are already maxed out, continue to pay on them and see about getting a secured credit card to help to build your credit. It will take several month’s time, but you can soon build you credit score up to the point where you will have no trouble qualifying for a loan, and can buy a car even though you have bad credit.
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