If you are embarking on the journey to improve a bad credit score, and are in need of a new vehicle, you may just be in luck. Acquiring a car loan is actually quite possible when you have bad credit.. There are many way to present yourself to a dealership, which will increase your chances of approval. Lenders are often able to offer car loans at a low risk, enabling you to get back on your feet and improve your credit score.
Car Loans Are Here To Help
When you have bad credit, it can be hard to acquire life-essentials that are of large monetary value. It can also be difficult to improve your credit standing in order to work towards those larger items. That’s where car dealerships come in, as they are able to partner with you at a low risk. You and the car dealership both have the same objective; you want to purchase a vehicle, and they want to sell you one. On this basis you can work together to arrange a deal that works for both of you. Car loans are easier to acquire as most people rely on their vehicle and thus are more willing to make payments when money is tight. This offers confidence to the lender, even if your credit rating is poor. In the event where car payments are not being made, repossession of a vehicle isn’t difficult.
Find Out Where You Stand
Before going to apply for a car loan, it is a good idea to check your credit reports and gain an understanding of where you stand. This will give you a good idea of the rates you can expect as well as provide a chance to ensure no mistakes have been made in your history, and to fix any if they come up.
Establish Good Recent History
Along with checking your credit rating, it is a good idea to ensure that you pay all of your bills on time for up to six months before you inquire about a car loan. Though this may not have any significant effect on your credit rating, it will show a potential car loaner that you have recently become more responsible with your payments, and that you are someone they can trust.
Limit Shopping Time Period
When you go car shopping, it is a good idea to limit the time frame in which you look, as each car dealership will pull a credit report, creating an inquiry on your file. These inquiries can hurt your credit scores, so it is a good idea to have them done around the same time, as most scoring models will count auto loan inquiries that happen within a certain time frame as a single inquiry.
Prepare to Make a Down Payment
If at all possible, it is a good idea to save up enough for a down payment on a vehicle. When you purchase a new vehicle the value of the car drops significantly as you drive it off the lot. Due to this well-known fact, a lender is less likely to finance a vehicle for the full amount, as the car will become worth less than you owe almost immediately. When you enter a dealership prepared to make a down payment, your chances of being approved for a car loan increase.
When times are tough and your credit score is poor, there is always an answer. Getting approved for a car loan may be a smart move in rebuilding your credit and getting on the right financial path. Through a common objective you are able to work with a car dealership to find a loan that works for you, no matter your credit rating.
Come to Sherwood Dodge today and talk to someone in our Financing Department. Let Sherwood Dodge get you financed and behind the wheel of a car today!