Having bad credit doesn’t keep you from being able to get approved for a car loan. However, it does limit the kinds of lenders who are willing to work with you. With that in mind, here are some tips on getting an auto loan when you have bad credit.
Many states will not even allow dealers to advertise “Guaranteed Credit Approval.” Why? It can be a very deceptive claim.
If you don’t currently have a credit card, you may want to apply for one, but you’ll need to be careful. Applying for credit cards the wrong way can actually make bad credit worse.
The FICO credit score is used by most lenders when making credit decisions. The FICO score is the one you want to familiarize yourself with before applying for credit. However, there are many different credit scoring models, and consumers can easily get confused about the score they are receiving from some sources.
Some people may realize that they have a bad credit score and think, “Big deal. I just won’t try to get a loan any time soon.” But damaged credit can affect a lot more than just your ability to get financing.
They old saying goes “It takes money to make money.” Well, it takes credit to build credit as well. If you have no credit history or are looking to rebuild bad credit, you need to practice responsible credit management. And using a secured credit card to build credit may be the perfect jumping-off point.
There are certain purchase rules that bad credit lenders will have when it comes to the vehicles they finance. However, eligible vehicle requirements will vary from one lender to the next. Here are the typical guidelines subprime lenders hold for the cars they finance.