People With Bad Credit Histories do Have Options
- By Diane Jurgens
- Published October 11th, 2011
- Finances
- Unrated
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Although it may not seem like it, people with bad credit histories do have options when it comes to purchasing a car. There are several factors that will go into a person with bad credit getting approved for an auto loan, but rest assured, it isn’t impossible to get the loan you want.
One of the most important factors that should be taken into consideration if you are looking for a car loan with bad credit is your credit score. Your credit score isn’t the only deciding factor in getting approved for a loan, but it is very significant. The lower your score, the higher the cost of borrowing will be. People with lower credit scores are considered a higher risk to lenders and therefore will not be getting the interest rates that are reserved for people with less blemished credit histories. One way to not be blindsided by an offered rate of interest is to know your credit score before you start looking for a lender. You can get a free copy of your credit report from annualcreditreport.com. You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each company one at a time. The law allows you to order one free copy of your report from each of the nationwide consumer reporting companies every 12 months.
Another factor that is extremely important in getting approved for a bad credit car loan is the lender. Most people with a poor credit history will not be approved for loans from traditio
nal lenders like their bank, so they have to use other types of lenders, but most people don’t know where to go after being turned down by their bank. Going to a large car dealership that has a special finance department is a great option for people with bad credit to get their auto loan. Any dealership that has a special finance department usually already has lenders onboard that are more prepared and experienced at getting a person approved for a car loan with bad credit. Some dealerships will even refinance auto loans with bad credit, but you usually have to make good on keeping up with timely payments for at least 3 years.
If you do plan on using the special finance department at a dealership, be prepared to have all the pertinent information that their lenders will need to get you approved for financing; a valid drivers license, copies of your paychecks so they can validate your income, bank statements, utility bills, and maybe even personal references. It’s important that you know what you need to have before you make the trip to the dealership- this will speed up the actual loan process with the dealership and their lenders.
Lastly, the most important thing to know before you start searching for a car loan, bad credit or not, is what you can actually afford, not only for your monthly payments, but for your down payment as well. Very seldom will a dealership let someone with poor credit finance a new or used car with no money down or zero deposit. And it won’t help your bad credit history if all you do by financing a car is to create more debt and blemishes on your credit report.
One of the most important factors that should be taken into consideration if you are looking for a car loan with bad credit is your credit score. Your credit score isn’t the only deciding factor in getting approved for a loan, but it is very significant. The lower your score, the higher the cost of borrowing will be. People with lower credit scores are considered a higher risk to lenders and therefore will not be getting the interest rates that are reserved for people with less blemished credit histories. One way to not be blindsided by an offered rate of interest is to know your credit score before you start looking for a lender. You can get a free copy of your credit report from annualcreditreport.com. You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each company one at a time. The law allows you to order one free copy of your report from each of the nationwide consumer reporting companies every 12 months.
Another factor that is extremely important in getting approved for a bad credit car loan is the lender. Most people with a poor credit history will not be approved for loans from traditio
If you do plan on using the special finance department at a dealership, be prepared to have all the pertinent information that their lenders will need to get you approved for financing; a valid drivers license, copies of your paychecks so they can validate your income, bank statements, utility bills, and maybe even personal references. It’s important that you know what you need to have before you make the trip to the dealership- this will speed up the actual loan process with the dealership and their lenders.
Lastly, the most important thing to know before you start searching for a car loan, bad credit or not, is what you can actually afford, not only for your monthly payments, but for your down payment as well. Very seldom will a dealership let someone with poor credit finance a new or used car with no money down or zero deposit. And it won’t help your bad credit history if all you do by financing a car is to create more debt and blemishes on your credit report.
Written by Diane Jurgens
Dee Jurgens is the head copywriter for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://myfreecreditscorenow.net Providing free credit scores for you and yours free credit score
