Everyone that’s interested in getting a new car should know as much about their credit history as possible. It will certainly affect your ability to get financing. If you have bad credit, then you’ll probably have a hard time getting financing.
Everyone, not just new car shoppers, should keep an eye on their credit report. Not just the report issued by one bureau either, but one from all three. There have been plenty of cases where people found mistakes on their credit report.
There are free sites on the internet that you can use to get your credit report. Make sure that you don’t just get your credit report. Your actual FICO credit score will be much more useful if you’re trying to get a car.
Your FICO score can be anywhere from 300 to 850. If you have bad credit, then your score will be approximately 640 or lower. This would definitely present a few problems when trying to secure a loan for a new car.
You should know that it’s possible for you to fix some mistakes rather quickly. However, this certainly isn’t the case if you have a recent bankruptcy. A few recent late payments shouldn’t cause much harm, but you will need to know exactly how bad your credit is.
One mistake that people with bad credit make is turning in applications all over the place trying to get a loan. Each time your credit is checked without you being issued credit, your score will decrease slightly. That’s why it’s usually best for you to limit the number of applications you issue.
It’s also important for you to know that you don’t have to get a loan from a dealer. There are plenty of options for you to choose from. If you’re a member of a credit union, you may be able to get one from them. Banks and financing institutions are also a good choice. Just make sure that you shop around since you’ll have to pay higher interest rates to start with since you have bad credit.
If you can’t seem to get a loan, then you aren’t totally out of options. You could look into taking over someone else’s lease. You’ll still have to undergo a credit check, but it’s not nearly as strict.
Doing a lease takeover is a good option for many people. People are often trying to get out of their leases for whatever reason such as trying to get a new car. They may even offer you a cash incentive to take over their lease.
If your credit is too bad, then you may want to consider waiting to get a new car. You could save up your money so that you can offer a larger down-payment. If you pay more money upfront for the car, lenders will view you as less of a risk.
You can also try to get a loan with a co-signer or a co-buyer. This person would be responsible for your car payments if you happen to default on them. If you have especially bad credit, then your co-signer or co-buyer will need to have excellent credit to make up for it.
A good way to raise your credit is to get an unsecured credit card. You would have to pay $500 or so dollars upfront then make monthly payments on time after using the card. After you have repaired your bad credit history slightly, it would be easier for you to apply for a loan.
If you can’t get a new car from a dealer, then you may want to check into a buy here, pay here dealer. They offer their own financing, so they don’t have to rely on a third party. This is one of the best options for people with really bad credit. However, they will be subject to paying higher interest rates.
These are some of your many options for getting a new car with bad credit. If possible, you should try to find someone willing to co-sign for you if they have good enough credit. You could also get a loan from a bank or credit union if you’re a member. If all else fails, then wait and try to rebuild your credit before applying for a new loan to get that Ford Mustang or Ford Expedition.