How to Buy a Used Car with Bad Credit and Get a Bad Credit Car Loan
If you need to purchase a used car but have bad credit due to slow payments, collections but paid now, divorce or medical reasons, you will find that your options are limited when it comes to financing with bad credit. Most banks and traditional finance companies only lend to those with good credit that is at least marginal or above. However, there are ways to buy used cars, even if you have bad credit.
Follow these steps and ask the professional staff at Credithelpfinancial for more details:
Find out why you may have bad credit: There are steps you can take to improve your credit score as much as possible before you attempt to apply for bad credit financing:
- Order your credit reports from each of the 2 credit bureaus: TransUnion, Equifax.
- Verify that the information on your credit reports is correct. It is not unusual for credit reporting agencies to make mistakes that could wrongly lower your credit rating. Sometimes, improving your credit score is as simple as disputing inaccuracies on your credit report.
- Pay small judgments and past-due accounts off. Even nominal amounts that are reported as negatives on your credit report can impact your bad credit for the worse. Paying them off could save you money in down payment and interest.
- Wait 6 months after cleaning up your bad credit report to buy used cars on credit. This will allow time for the credit updates and scoring improvements to take place.
Set realistic expectations: Be prepared to have to accept a high interest rate and to have to put down a large down payment.
Figure out how much per month you can afford: List all of your expenses and compare them to your income. That way, you will know exactly what you can afford to pay per month and you can avoid getting yourself into a situation that could further worsen your credit.
Save money for a down payment: If you have bad credit, you can expect to have to make a relatively sizable down payment in comparison to scenarios involving good credit. This will give you the opportunity to have a bigger selection of cars.
Look into auto financing for bad credit: It is best that you get pre-approved for an auto loan before you go shopping. The Credithelpfinancial staff can help you get pre-approved.
Find a dealership that specializes in used cars and bad credit financing:
You can go to www.presleysauto.com and check out their inventory.
These are often referred to as buy here pay here or Lease to Own
Co-signers: You may be able to find a friend or family member who will cosign with you to help you obtain an auto loan.
Sub-prime lenders: These are lenders that specialize in lending to those with damaged credit. An Internet search will return numerous sub-prime lenders, and you can fill out an application online at www.credithelpfinancial.com and have an answer quickly.
Complete the credit application: You will need to prove employment, income and residence, and provide whatever documentation the finance professional requires of you.
Do not agree to payments that are higher than what you know you can afford: The dealerships you buy used cars from may offer more than what fits in your budget, so remember that it is your responsibility to stay within a price range that is best for you.
Beware of multiple credit inquiries, as they can lower your score even more: That means applying to only one auto dealer at a time and only to dealers you know specialize in bad credit financing, like credithelpfinancial. We will look at your bad credit situation first before sending it to the banks and not send it to muliple lenders without discussing it first with our customers.
At Credithelpfinancial we will always try and get you the lowest rate available regardless of your bad credit or credit history.