Having bad credit is a drag. It keeps you from getting some of the things you want, and some of the things you really need. While it could be argued that nobody really “needs” a car, the truth is that they are a necessity for a lot of people. There is good news, however, in the form of bad credit auto financing. There is no question that it’s harder to get credit than it was a few short years ago, but it’s not impossible when you know how.
The first thing to do before trying to finance an automobile is to get free copies of your credit report from all three reporting agencies. Look over them carefully to see if they contain any errors. Believe it or not, such errors are more common than most people think. Report any inaccuracies, in writing, to the appropriate agency. They will then have 30 days in which to respond. If they are not able to confirm the legitimacy of any items, they will have to remove them from your report. Doing this one thing alone can have a dramatic improvement on your credit score.
The next thing you need to do is figure out just how much you are willing to purchase a car for. Remember to include how much of a down payment you can pay now, and how much you can afford in monthly payments. You can always use an online car loan calculator to make it easier to figure out how much it will cost.
After that is done, you will need to get some paperwork together to get your bad credit auto financing. But don’t worry, it should be relatively simple to do. All you should really need is proof of how much you earn as well as check stubs from your employer to show that you’re working. The fact that vehicles depreciate in value is one of the reasons that this income verification is needed. It’s a form of insurance for the lender.
The other major thing you can do is work as hard as you can to improve your credit score. This means paying all of your bills on time. The longer you can do this, the higher your credit score will continue to climb.
You should know that having not so good credit means that most car dealers will require a larger down payment and will also charge you higher than average interest rates. This will make your monthly car payments higher than they could be, but if you need a car then bad credit auto financing may be your only viable option.
Some places may charge as much as 25% interest on an auto loan if you have bad credit. That’s why it’s so important to do what you can to improve your credit. However, if you need a car now and don’t have time to work on your credit score then at least go online to compare various bad credit auto financing options.