How to get a Bad Credit Car Loan the right way

If you don’t do your homework before you apply for a bad credit car loan, you could end up getting into a sales contract that you can’t repay. The result will be more bad credit, instead of improving your FICO score.

First things first, know your credit score

Here at Auto Credit Express, we recommend that you know, ahead of time, what is on your credit report and what your FICO score is. If you have a credit score that is above 640, there is a good chance that you can get a car loan with a conventional lender. This is important, since the conventional lending process is much different from the subprime lending process. If your FICO score is below 620, you will probably have to deal with a bad credit car loan lender.

Know how much car that you can afford

This is important with any kind of loan, but it is especially important if you only qualify for a subprime car loan. Spending too much on a car – even if your budget shows that you can – can often be a big problem. Subprime lenders can be very aggressive with their collection policies and the late payment fees can quickly add up. Therefore, you need to set aside a realistic budget for your car. Be sure to set aside money for major repairs if the car isn’t under warranty or you haven’t purchased an extended service contract. Include gas as well as insurance costs (full coverage). At, you’ll find a number of loan calculators that will help you estimate your car payment as well as give you an idea of your car budget.

Choose your car dealer carefully

Before going to a buy here pay here lot, remember that they don’t report to the credit bureaus. Even though they don’t examine your credit report before loaning you money, they also don’t report your positive payment history. This means that getting a car at one of these dealerships won’t help repair your credit and it won’t improve your credit score. At Auto Credit Express, we have helped thousands of customers, with good credit and bad credit, buy a new or low mileage used vehicle that is not only reliable, but will help them reestablish good credit.

The Bottom Line

Even if you think your only option is a “tote the note” or “buy here pay here dealer, we urge you to visit our web site at for payment and loan information. Review the loan qualifications for a bad credit auto loan. If you meet the basic requirements, fill out the application and we’ll send it to a dealer near you – one of 500 nationwide that specializes in a full range of automotive finance choices. Remember, here at Auto Credit Express, we want you “on the road” to good credit!

Posted on June 25, 2008 by in New Cars, Used Cars
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