Preparing for a Bad Credit Auto Loan

Before applying for no credit auto loans here is what one credit counseling organizations recommends

Fresh start

Sometimes making just a couple of adjustments can make a big difference before you apply for approved auto loans.

We have seen what can happen when you do during the nearly two decades we’ve been involved in bad credit car sales here at Auto Credit Express.

We can also show you how a tote the note dealer won’t help your FICO scores and explain the loan process (to reduce your chances of repossession).

We also are pleased to pass on the good advice from others that are familiar with bad credit and know what they’re talking about, such as this advice from GreenPath Debt Solutions:

Check your credit report before auto shopping

A good credit score and “debt to credit ratio” can save you money and help you obtain better interest rates.

According to GreenPath credit counselor Dorothy Guzek, it’s important to know that there are two very different pre-qualifications for obtaining a favorable interest rate on an auto loan. “One is to have a good credit score,” said Guzek. “The second is to have a favorable ‘debt to credit ratio.’ Both of these components are equally important.”

How long before making an auto purchase should buyers start getting their credit in order?

Everyone should look at their credit report at least once a year.  You can get a free copy of your credit report at www.annualcreditreport.com, but you do have to pay for a score. Guzek recommends paying for the score and suggests pulling the report at least six months before you start auto shopping.  “This will allow you ample time to correct any incorrect information that you might find.”

How high should auto buyers aim to get their credit score before buying a car?

Currently there are three major credit bureaus, Equifax, TransUnion and Experian, and each has a slightly different scoring system.  As a rule of thumb, a grade A score is between 680 and 719. “Credit scores are like your high school report cards. There was nothing wrong with a B or a B+, even though an A+ score may bring you a better interest rate,” said Guzek. “The bottom line is to make sure you work towards getting the best score possible under your current circumstances.”

Why shouldn’t consumers open or close credit cards before purchasing a car?

Guzek explains that if you close a card without a balance, you are raising your debt to credit limit ratio, which lowers your credit score. If you close your oldest card, your length of credit history becomes shorter and this lowers your score. If you open up new cards, it signals to the lender that you may need credit cards to pay your existing bills and this, in turn, lowers your score.

As we see it

The previous advice applies to all buyers, but it could be especially helpful those applying for a bad credit auto loan.

Auto Credit Express has helped thousands of people with bad credit buy cars and establish their car credit at the same time. Our nationwide network of affiliate dealers specializes in problem credit auto loans.

So if you are serious about getting your car credit back on track, you can begin right now by filling out our online car loans bad credit application.

Posted on August 8, 2011 by in Auto Loans, Bad Credit, Credit Repair
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