Don’t Let Bad Credit Prevent You From Getting An Auto Loan

 In Auto Loans

If your bad credit has you thinking you’re at a complete loss of getting an auto loan, think again. In fact, an auto loan can be a key tool in helping improve your credit for the future. Don’t subject yourself to failure and guilt for a couple of bad decisions. With a little research, perseverance, and realistic expectations, you can still find a good deal for purchasing a car and get back on the road today! The following tips can help get you into a new car and on the road to better credit!

  1. Check Your Credit: Your credit score is determined off the FICO scale from a range of 300-850. It’s common knowledge that the higher scores will secure the best rates, but many people don’t actually know their true credit score and that could be detrimental when applying for a car loan. And your score could be higher than you think! For a more accurate score, check out myFICO.com.
  2. Take the Middle Man Out: We’ve all seen the car lots with “Buy Here, Pay Here!” signs and while it seems convenient, you might want to think again. It is important to get financing before you ever step onto a car lot. Not only will it give you confidence not to be swayed with additional warranties and protections you don’t need, but it also makes the car buying process streamlined, quick, and easy.
  3. Research Lenders: It might be difficult to get approved at the big banks so expand your search to something more realistic. Credit unions are friendly and approve many people with bad credit, although you will be subject to higher interest rates. Also look for online lenders and reviews from people who have utilized them in the past.
  4. No extra baggage: Don’t try to ignore your problems if you are dealing with a headache of a car. Although it seems convenient to trade in a car with an unpaid balance, you could set yourself up for a bad car deal. Many auto lenders say that they will pay off their loan regardless of the balance, but they don’t explain the negative implications. If you aren’t careful you could end up with a new car with the balance of the old car tacked on to it. You could be left with an outrageous interest rate and monthly payments you can’t afford.
  5. Adopt good financial habits: Continue to pay your payments on time. An auto loan is an installment loan, which is a key factor in calculating your credit score. If you show a good pattern of paying your loan off, it will improve your score and allow you to refinance to a lower interest rate in the future.

If you have any further auto loan questions, don’t procrastinate. Credit Care Company will get you the help you need. PleaseĀ contact us today!

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