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Getting a Car Loan with Bad Credit: A Guide
Getting a car loan with bad credit can be a challenge, but it’s not impossible. By following a few simple tips, you can increase your chances of securing a good loan.
First, check your credit report for errors. “The first thing I always tell anyone is, before we go into any loan or purchase, let’s check your credit and know where you stand,” said Amy Miller, Accredited Financial Counselor and program manager at America Saves. Fixing errors on your credit report can give your score a boost and put you in a better position for a car loan.
Another key step is to increase your down payment. Your down payment can help offset your low credit score and secure more favorable terms. “The [credit] score is not the real driver here,” said Yossi Levi, founder and CEO at Car Dealership Guy and a former car dealer. “An incremental 15-point bump in your credit score won’t make as much of a difference as having a larger down payment.”
Additionally, consider buying a used car. As a subprime borrower, you’ll have a better chance of getting approved for a loan for a used car, which will usually cost less than a new car.
It’s also important to compare lending options. MyAutoLoan is an online marketplace that can help you compare different loan offers and secure the best deal.
Finally, don’t overlook local banks and credit unions. Some may have programs for borrowers with poor credit, so be sure to check.
By following these tips, you can increase your chances of getting a car loan with bad credit. Remember, the key is to be proactive, patient, and persistent.
