How to qualify for bad credit used car loans.
If you’re in the market for a used car with bad credit, read on for some helpful advice on how to qualify for bad credit used car financing.
While most of us would prefer to buy a new car, when our monthly earnings and credit histories collide the reality is we need payments we can afford and, therefore, less car. The SmartCarCredit service was specifically developed to help people find bad credit used car loans. In partnership with used car dealer loan platforms, we can introduce your bad credit used auto loan application directly to lenders and dealers in your area. Keep in mind that lenders may charge higher interest rates on bad credit used car loans. Now that you can apply online for bad credit used car loans, make sure to shop around!
Here are a few things to do to put your best foot forward when working with used car lenders:
- Review your credit report. Ensure that each line item is accurate. While your balances don’t need to be accurate to the penny and credit reports may not reflect your balance today, they should be relatively close. Unfortunately, credit reporting errors are not as rare as one would expect. If you find an inaccuracy, write the credit bureaus providing your name, address and details about the error. They are committed to clearing up errors. Having said that, if you have a legitimate bad credit car loan on your record, there is little they can do to help. Click here to read more about your credit score.
- Access your credit score. You can get your credit score from the three major credit bureaus (Trans Union, Experian and Equifax) for free once each year. As this is the key number many lenders start with, knowing your credit score will help you anticipate their reaction to your bad credit used car loan. If you get rejected from prime lenders, look for lenders specializing in used car loans for bad credit.
- While you may start at the dealership, don’t stop there. Dealers earn commission on every car dealer loan they originate. If it’s a car loan for people with bad credit, their commissions may total over $1,000. Many sites advise you to get a car loan before setting foot in the dealership. We suggest you get multiple used car loan quotes before going in, but don’t sign anything! Dealers commonly have relationships with from 5 to 20 banks and auto finance companies. Leverage the groundwork they’ve done by comparing their quotes with the ones you may get from Smart Car Credit. Click here to read more about used car loans.
- Remember rates vary. Each lender has his “sweet spot” or credit profile they prefer to lend to based on past experience. It’s in this sweet spot that they provide their best terms. You won’t know you’re in the sweet spot until you’ve shopped a number of bad credit used car loan providers. When you receive a loan quote (from SmartCarCredit or by walking into a local bank or credit union) ask the loan officer about their auto credit tiers and auto credit rates. They’ll give you an idea of where you fall. If they can’t make you a poor credit used car loan, they may know of a bank that will. Click here to estimate your car loan rate.
- Improve your credit. It can take seven to ten years for problem items to fall off your credit report. With the average used car loan coming in at around five years, there’s no time like the present to start improving your score. While it won’t save you money on this bad credit auto loan, your next one could be less expensive. Remember to check your check your credit score every year tracking your progress out of subprime. Bad credit used car loans can even help you improve your credit score over time.
Click here to read more about working with used car dealers
Consider applying for an online bad credit used car loan. However, online or offline, shop around before signing. See what terms lenders and dealers provide for bad credit use car loans today by submitting SmartCarCredit's easy loan application form. We’ll match your credit profile to the auto lending programs of providers in your area. They’ll contact you with quotes for your credit score. Regardless of whether it is a bad credit used auto loan or a prime used auto loan, you’ll get quotes you can take with you as you shop for that perfect used car.
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Disclosure: We developed the content for SmartCarCredit™ while working with automotive industry clients. We hope you find it helpful in making informed decisions. While we believe the information to be accurate, we do not guarantee its accuracy.
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