Bad Credit Auto Loans: 4 Tips to Drive Home the Vehicle of Your Choice

Posted on Dec 10 2013 - 8:44am by Paxton Yoshida

acquiring car loanThe word “bad” is just a matter of opinion. When this connects to the word “credit,” some people panic and see nothing but the negative. But bad credit doesn’t always mean you can’t buy what you want, including your preferred car. It doesn’t mean that you’ll only get it if your credit score has improved. You can find credit companies specializing in bad credit auto loans.

You have to plan this purchase carefully. It’s a major expense and you’re only beginning to rebuild your credit. You might dig a deeper financial hole if you choose the wrong lender. Here are a few tips to help you out.

Look at your credit report

Don’t just take someone else’s word that you have a poor credit rating and you’re not eligible to buy a car. Make a move and check all your credit reports. Make sure all the information written on the document is correct. If you do find incorrect details about your credit, have it corrected right away.

Dealers aren’t always your best bet

After checking your reports and verifying that they’re correct, it doesn’t mean you’ll just go to dealerships offering auto loans. You’re probably not aware of it, but dealers usually take commissions from all financing deals they land and as a result, any loan they can get you is a bit costly. Contact other financial institutions on your own. Talk to reliable institutions and secure your auto loan before entering dealerships to avoid overhead charges.

Learn to shop around

No rates are similar. Look around and see what deals suit your paying capacity. Don’t pin your hopes on only one lender. You have different options so go for something that fits your lifestyle.

Your credit score changes

You have total control when it comes to your credit history. By paying bills or your loan on time, you can improve your credit score and your reputation with credit institutions. You may have to pay more than you’d prefer during your first year, but in a few years, you’ll probably get a loan at a much lower rate because of responsible payment.

Bad credit doesn’t mean you’re constrained from buying your dream ride. You just need to do your due diligence and use your common sense to drive home the vehicle of your choice.

Sources:

http://www.bankrate.com/finance/auto/9-steps-to-a-car-loan-on-damaged-credit-1.aspx
http://www.wisegeek.com/how-do-i-get-a-car-loan-with-bad-credit.htm