Bad credit buyers may have the same three choices as those with good credit but two of them are very limited when it comes to applying for car loans with bad credit

Our experience

At Auto Credit Express, we've been helping retail bad credit car buyers get financed for over two decades. During that time, we've personally helped hundreds of buyers reestablish their car credit while helping them avoiding a tote the note dealer as well as counseling them on the smart way to approach the bad credit auto loan process (buyers who aren't smart can end up in repossession).

That being said, there are usually three ways that car buyers can apply for an auto loan and today we'll discuss how each is affected if a person has bad credit.

Applying directly

The first choice that car buyers have is to apply directly to the lender for a car loan. Before the internet, this was done by visiting a bank and applying with a lending officer there. With the advent of online lending, car shoppers can also now go online and not only compare rates, but also apply for a loan directly with the lender.

This direct application model works very well if you have good credit, but if your credit scores fall below a 640 FICO and you need a bad credit auto loan, things are not so simple.

The fact is, most bad credit lenders, due to documentation issues (such as verifying employment and income) only work indirectly through franchised new car dealers. For this reason, people with bad credit will find that applying directly for a car loan will not only be difficult, but their choices will also be limited and they could end up paying a much higher interest rate.

Applying at a dealership

The second choice that car buyers have is applying for a loan at a car dealership. This also works well if you have good credit, since you can shop for loan rates online and then compare these rates with those offered by the dealer, in which case the best rate wins.

If you have bad credit, however, this can be a hit-or-miss situation, since not all car dealers offer second chance auto loans.

Applying on a bad credit web site

For bad credit buyers, the third choice is applying online at a bad credit auto loan web site. In this case, your chances of getting approved depend upon the size of the site's dealer network as well as the transparency of the site, itself.

By transparency, we mean how the web site presents itself. Is the bad credit car loan application on the site secure? Does the site belong to the Better Business Bureau and what is that site's reputation with the BBB? Does the site offer a resource section where you can learn about bad credit car loans and does it include various finance calculators to help you determine if you even qualify for a car loan? And finally, is there a toll free number you can call in order to speak to a customer service representative about your individual situation?

If a bad credit car loan web site doesn't feature all this, you might want to consider one that does before applying for car loans with bad credit.

The Bottom Line

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

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