Bad credit used car financing options may seem hard to find, however, there are certain steps that can be taken in order find this kind of financing. If you have poor credit and need financing to purchase a used car, follow the steps below which can help you to attain the loan that best suits your situation.
Before you seek and apply for a loan, take some steps to improve your chances of obtaining that loan. First, make payments on your bills on time for several months. This will improve your credit score and will show lenders that you can be credit-worthy borrower. Second, save a little money each month in order to make a down payment on the car. Create a car savings account and put money into it each month. You'll have a better chance of being approved for a loan if you have a down payment toward the car. Third, wait for several months before applying for a loan. In this way, you will most likely be in a better position to pay for a car as you have saved some money during those months.
In order to get the best rate available, you should know your credit score and the details of your credit report. Be sure to first obtain a copy of your credit report and examine it carefully. Make sure that any negative marks are accurate, and if they are not, take steps to change them. Next, when looking at your credit report, you should also take note of the reported credit limits. You want to have as high a credit limit as possible and as low an amount of debt. Also, make sure the correct credit limits are reported on the credit reports. Last, if you have old credit cards, use them for a small purchase every month or two and then pay the balance off completely. Creditors like to see old lines of credit and the longer you have had a credit card or credit line, the better it is for your credit score.
Be sure to find a reliable vehicle that is reasonably priced. Take precautions when shopping for a vehicle as it is easy to get suckered into buying a newer car than you need at a higher price. If numbers and figuring interested rates are not your forte, then take someone with you who can help you choose a reasonable car. The reliability and price of the vehicle is the most important factor when you're looking for bad credit used car financing.
Take your newly improved credit and start with credit unions and banks to see their particular auto loan offers you. Even if you have to go with higher rates and longer loan terms through the union or a bank, you will likely get a better loan from them than from a dealer. If you do end up at a dealership, be sure you understand the loan and its terms before you sign any paperwork.
