Poor or no credit does not mean that you cannot avail auto loans, or that you have to pay more. It only means that you may have to shop a little longer and be a little wiser than others. Here’s how to find car loans for bad credit:
Recheck your credit score:
A lot of people often assume they have bad credit just because they have been making late payments, or you have used too much credit on your card. There are several factors that affect credit rating – some of which can be easily remedied. For example, fixing errors in credit reports, taking care of old collection records, etc. can help to boost scores. How old is your credit score? The federal law allows you to get one free credit report from each of the national credit rating companies, once in a year.
Improve your credit score:
As we earlier said, you can work on improving your credit scores with a little effort. Speak to your old collection agency to check if they’ve updated the old debt records, pay off your credit card debt, and clear other errors. If the car isn’t an urgent requirement consider waiting until your scores are better.
Explore other options:
There are several companies offer car loans for bad credit. There are several lenders that specialize in bad credit auto loans. You can either choose to buy a new or used car, depending on the options available and your ability to repay.
Shop around:
People with bad or no credit often restrict themselves to choosing from one or two sources without shopping around. But do so within a timeframe of 15 to 45 days. Every time you apply for a loan the lender checks your credit, thereby creating a credit score.
And remember, two people with the credit score can be view evaluated differently. Different lenders place importance on some factors more than others.