If you're dealing with credit troubles, a bad credit auto loan can get you the car you need and also a chance to improve your credit with on-time loan payments. These tips can help your chances of getting approved if you're dealing with poor credit.
Clean Up Your Credit Reports
We recommend that consumers know their credit score and what's on their credit reports before they apply for a loan. It's best practice to order your credit reports from all three of the national credit bureaus (Experian, Equifax, and TransUnion) and carefully look them over. Look for inaccurate information that could be bringing down your score. You can dispute errors and have them removed, which can give your score a boost and help your approval chances.
Make a Down Payment
Having a down payment will help you get approved, but, more importantly, it'll help you save money. Every cent you're able to put down will reduce the amount you need to finance. When your loan is smaller, so are your monthly payments. Not to mention, putting money down reduces the amount of interest charges you'll pay. It's truly the greatest way to set your loan up for success. While most people would prefer little or no money down, it's likely you'll be required to make a down payment on a bad credit auto loan.
Get a Cosigner if Needed
If your credit is suffering, a lender may be more willing to approve you if you have a cosigner – somebody with good credit to sign the loan agreement with you. You can essentially "borrow" their good credit to give your application the boost it needs to be approved. Make sure you and your cosigner understand what you're agreeing to beforehand.
Work with the Right Dealership
One of the biggest obstacles standing in your way of getting approved is the simple fact that most lenders don’t work with bad credit applicants. The key is finding a special finance dealership that's signed up with lenders who are willing to help.
Luckily, Drivers Lane is here to help you do that. We are connected to a nationwide network of car dealers who specialize in helping people in challenging credit situations. We can guide you toward a local dealership when you fill out our free and secure auto loan request form.