How to finance a car with Bad Credit?
Checking your Credit Score
The first and easiest step to financing a car with bad credit is knowing your credit score. You would be surprised by the number of people that do not know their current credit score, which is needed for many important purchases in your life. It is as simple as requesting your credit score from major reporting agencies like Experian and Equifax. There are many factors you can address in making sure your payments are on time and other actions necessary to improve your credit score. Knowing your credit score allows you to see what option you might have available at your local dealers.
Potential Hazards to your Credit Score
In the months leading up to your purchase, it is important to not have any major credit obligations including any new credit cards. Any previous agreements and or contracts could on your credit score create a risk for dealers to accept your credit score. Ways to prevent yourself from creating potential hazards for your local dealer to consider is your payment schedule, lawsuit judgments, bankruptcy, and any debt collections.
Improve your Credit Score
One of the biggest reasons many cannot buy the car they want is simply because they need to improve their overall credit score. This means anything like paying off your credit card debt to clearing up some errors can help you bump up your score to 700 thresholds. Taking the time to better your credit score and raise your score is the necessary answer to helping your credit score, and has the potential to save you money in the long run.
Local Interest Rates
You can check the interest rates in your local area that will help you better understand what rates you should expect. Many people do not know that with good credit you will receive for a rate at or below average, but with bad credit, you will most likely get a high-interest rate. The loan rate of the car will not affect the monthly payment but the overall cost of the vehicle you desire.
A Car you can Afford
Create in mind your budget for the car of your choice, and take into consideration that they will be paying for the car’s monthly cost, insurance, registration, and sales tax. Take the whole cost of the car into your bills and payments to see if the car of your liking is in your price range. This is the time to go research as much on the car to see average prices in your area and find the deal that is best for you. If you are in the greater Fresno area and are looking for a car, come on down to Western Motors Los Banos to select from our wide inventory of used cars in-store today.
Bigger Down Payment
Making an overall bigger down payment on the car will help you offset the interest and tax rates on the vehicle you desire and will help you widen the selection of cars in your budget. Taking the time to save up enough money to one day buy the car of your dreams is a must in many consumer's eyes. Your credit history will limit your ability to get the cars you want and a high-interest rate will create a difficult time in choosing your dream car.
Many people go online to get pre-approved for the loan that they want making it easier to work with. Go and talk to your local banks and credit unions about the car loan right for you and figure out the process of getting pre-approved. If for some reason you cannot get approved for the loan you want, your car salesman may be able to get you in contact with a dealer that caters to buyers with bad credit.
Compare Interest Rates
Compare the estimated interest rate and loan that is offered to you by your local dealers to see which one fits you best. Buyers with low credit scores will most likely receive higher interest rates because the dealers are taking a more recognized risk. If you cannot get pre-approved by banks and credit unions for an auto loan you may consider getting a loan from the auto dealers, but beware that the interest rates may be higher than what an authorized financial institution may have given you.
In the end, you have to focus on your credit score and find ways to improve your score to get approved for the loans you want. Finding the bank that will approve you the loan you want and will accommodate you the best is challenging and makes it harder for buyers to get the car they want. Buying a car with bad credit is not difficult but can be hassling at times, and at Western Motors Los Banos we take care of each customer to make sure they find the deal they diverse and drive away in the car of their dreams.