Car Loans for Bad Credit
There are a number of factors used to determine your FICO score (the most widely used credit score). Where you fall in this ranking will determine whether you can use the traditional lending method or if you need to apply for car loans for bad credit.
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The key credit factors include:
- Payment history
- How you've paid on your current accounts is reflected in approximately 35 % of your score. Timely payments on all your accounts can help you secure vehicle financing through a bank, credit union, or dealership. A less than timely payment history could mean that car loans for bad credit may be a reasonable alternative. More recent late payments will have a higher negative impact on your score, while those from the past have less of an effect.
- Current debt versus maximum credit
- Your current debt load will affect about 30 % of your FICO score. Maxing out your credit cards is never a good idea. The ideal is usually considered to be a current debt load at 20% of your available revolving credit. Try our car loan payment calculator.
- Time in the bureau
- Around 15 % of your FICO score is determined by the length of time you've been using credit. A “thin” credit file can adversely affect your credit score. Specialists in car loans for bad credit can help you re-establish a good credit history and improve your credit score.
- Recent applications for credit
- Recent applications can impact your score by close to 10 %. Try to limit the amount of new credit that you apply for. By applying online for car loans for bad credit, you can avoid multiple inquiries on your credit bureau that could have the effect of lowering your credit score.
- Types of credit
- The types of credit you are currently using impacts your credit score by approximately 10 %. A lack of auto credit can hinder your ability to receive an approval for an auto loan. You can use car loans for bad credit to rebuild your auto credit, thus enabling you to qualify for better terms on your next vehicle.
Car loans for bad credit are available for those who have experienced financial problems in the past. They are fast and easy to apply for and can be accomplished in the comfort and security of your own home.
Basic Financing Requirements
- At least one year at the same employer for those with no credit rating.
- At least two years of employment history for those with some kind of credit history.
- Minimum monthly gross income of $1500.00.
- Money down may be required, but is not necessary in every case.
- No repossession within the last 12 months unless included in a bankruptcy.
- No motorcycle or private party purchases.
- Must reside in the United States or Canada.
Customer Testimonial
"The special finance manager was extremely busy, but was always extremely
courteous and pro-
fessional. It was a
pleasure doing bus-
iness with my local
Drivers Lane dealer."
courteous and pro-
fessional. It was a
pleasure doing bus-
iness with my local
Drivers Lane dealer."
Matthew K.
Auto Loan Terminology
Lease Agreement
For people who don't own their home, a lease agreement is used to verify monthly housing cost obligations.
Sep 02, 2010, 9:35 am Frequently Asked Questions
What are the monthly payments?
Monthly payments are based on your credit profile and the vehicle you are purchasing. Newer, lower mileage cars qualify for extended terms. The best payments are on less expensive cars that have under 50,000 miles.
Sep 02, 2010, 8:34 am