There are a lot of reasons why you may end up with a bad credit score. A few poor financial decisions, a divorce, medical bills, losing your job, or any other unexpected expenses that you are unable to pay for are all things that can cause a decrease in your credit score. While you can repair your credit score over time, it can be difficult to secure a car loan in the meantime. The good news is that there are a few things that you can do that increase your chances of getting a car loan with bad credit. Here are three tips.
Check Your Credit Report
If you have less-than-stellar credit, checking your credit report can be cringe-inducing. However, it's important to make sure that all the information is accurate. Errors on your credit report can make your credit score worse than it should be. The good news is that if you catch an error, you can dispute it and have it removed from your credit report. More than one in five people have an error on their credit report that may have an impact on their score. Fixing an error in your credit report may have an impact when you apply for car loans.
Take Steps To Boost Your Credit
When it comes to car loans and your credit score, time is your best friend. If you have some time before you need to purchase your vehicle, you should use it to take steps to repair your credit. This means paying down credit card balances and resolving any accounts that have gone to collection. On average, it takes a minimum of a year to repair bad credit. However, even just a few small changes can make a big difference in your score over just a few months.
If you have bad credit and know that getting a car loan will be difficult, there are still financing options out there for you. Getting pre-approved for a car loan through a bank or credit union is something you should look into. If you are unable to get financing on your own, many car dealerships work with those who have bad credit and can help you find a lender willing to work with you. In these situations, having a sizable down payment may also increase your chances of getting financed.
Getting car loans with bad credit can be a challenge, but it's not impossible. If you have bad credit and are looking to purchase a car, it's important to check your credit report and ensure that there aren't any errors that are keeping your score lower than it should be. You can also take steps to improve your credit score. A few small steps can make a big difference. Getting pre-approved for financing can also help.