The best bet for people with bad credit to once again qualify for an auto loan with regular interest rates is a bad credit auto loan
Where to begin
If you have bad credit, you may be wondering what credit repair options you can use that will most quickly allow you to reestablish your car credit to once again qualify for a car loan at prime or near-prime rates. We realize this, because at Auto Credit Express we've been working at the retail level with car buyers that have poor credit for over two decades.
And after seeing the embarrassment and obstacles that customers with bad credit often face, we developed a web site featuring a bad credit auto loan application. We then match these applicants with dealers that specialize in getting customers with credit issues approved for car loans.
The alternative for most bad credit buyers usually means buying a vehicle from a tote the note car dealer – an issue because these dealers usually don't report car payments to the credit bureaus. This means the next time these customers apply for a loan, they will probably find themselves in the same position they were before.
This kind of loan can also result in a greater chance of repossession.
Revolving and installment credit
You may be asking, “Why should I get a bad credit car loan? I can pay cash for a car and get a credit card to rebuild my credit.” This might work, but there is at least one reason why it probably won't, even if using your credit card does raise your credit score.
This is because a credit card is a type of revolving credit. This means that if you don't pay off the balance every month, the credit card company will allow you to carry over (revolve) the remaining balance to the next month – while charging you interest for this privilege.
A car loan is a type of installment credit. With an installment loan, you sign a contract that states you will pay back the amount borrowed, plus interest, at a fixed payment each month during the loan term.
As a rule, installment credit limits are higher than revolving credit limits and require a higher monthly payment as a percentage of the loan amount. Installment credit contracts are also much less flexible to any modification, meaning the buyer has to be more disciplined in paying back the loan.
Your auto credit
In determining your credit scores, the credit bureaus look at both types of credit. And while automotive lenders will look at your score and entire credit history, they put a special emphasis on how you paid your car loans. In other words, while a good payment history with a credit card will help your credit score, it's not the strongest type of credit to bring to the table if you're applying for an auto loan.
For this reason, many applicants with decent credit scores can still be turned down for a regular car loan if they've never had one before or if it turns out that that one of their previous car loans had a spotty payment history. In both of these cases, the applicants might have to prove themselves to a regular lender by first establishing themselves with another lender – and in most cases, that other lender will have to be one that offers car loans with bad credit.
Applying for a bad credit car loan
At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help get them financed. These affiliate dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance at getting approved for a car loan.
So if you are serious about getting your car credit back on track, you can begin a new chapter in your life by filling out our bad credit car loan application now.