Your State's How to get a Car Loan with Bad Credit, Bad-Credit Car Loans

Bad-Credit Car Loans Are Possible
Joel Walsh

Bad-credit car loans may not be easy to find, but if you need a
car, they are worth it.

Bad-credit car loans carry a higher risk to the lender, so the
borrower must pay a higher than usual interest rate. You
probably will need to apply to more than one lender and give
more documentation. Still, a bad-credit loan is worth the
trouble because it not only lets you get the car you need and
want, but can also help improve your overall credit rating.

Getting a Car Loan with Bad Credit: 4 Steps

1. Contact Equifax, Consumerinfo, or TrueCredit online for your
credit score or to make sure there are no errors on your credit
report. You can usually dispute the incorrect information
online or over the telephone. If you have correct unfavorable
information, you can write a letter to the company that
reported the unfavorable information, asking them to remove
that information or make a note that your accounts are now in
good standing. Usually they won't do this, but it doesn't hurt
to try.

2. Determine your credit score (also called a FICO score).
There are simple online guidelines for estimating your credit
score yourself. Still, to get a truly accurate score, you need
to purchase it from the credit bureaus.

a. Note that each bureau may have a slightly different score
(and possibly a very different score if they have information
the others do not). There are online credit-monitoring services
that will provide you a single report with all three reports and
credit scores.

b. A score of over 680 out of 850 will get you a low-rate auto
loan. Under 680 will mean a higher rate but a loan is still
quite likely. Bad credit begins around 650 and lower. You will
be charged high interest no matter where you go, and may not
qualify for as large a loan. But it will still be a loan
nonetheless.

3. Look on the Internet for names of lenders that specialize in
bad credit car financing. They can be private lenders, car
dealers or any website offering this type of loan help. Compare
the rates and terms with what your own bank offers. Make a short
list of lenders with good rates and terms.

4. Call up the lenders and ask them about their credit
guidelines. They will often be reluctant to state a single FICO
score, but you can sometimes get them to tell you a range. It’s
important to make sure you have a fighting chance at approval
before applying. A bunch of rejected loan applications will
look bad on your credit report--creating a vicious cycle that
makes it even harder to get a loan.

Bad Credit Car Loans: A Typical Story

Stephen got a credit monitoring service to provide him with his
reports from the three credit bureaus, as well as their three
FICO scores. He was shocked to find his credit score was 560.
He was reported as having defaulted on one of his students
loans, which was incorrect. He was able to get that removed
quickly. But his credit rating was still well below 650.

What should Stephen do now? Of course, Steven should work to
repair his credit rating:

• Pay all bills on time.

• Stay at the same address and the same job for a few years if
at all possible.

• Contact the lenders who reported negative information to the
credit bureaus to see if they will remove it or amend it to
emphasize that his accounts were eventually returned to good
standing.

But in the meantime, Steve needs a car loan. His job isn’t a on
a bus route and he can’t pay cash. After careful research on the
internet, Steve finds he could get a high-interest bad-credit
auto loan. The loan will also give Steve another chance to
restore his credit.

To take a bite out of the interest, Steve gets a friend of his
who’s a mechanic to help him find an inexpensive but reliable
used car—which means a smaller loan and therefore smaller
interest payments. He also dips into his savings and 401(k) to
pay as much up front as he can, since the interest on the car
loan will outpace the interest he could earn on these accounts.


Five years later, Steve’s credit rating is as good as gold and
he trades his used car in for the car he always wanted.

What will you be driving in five years? If you plan well and
get the best deal possible on your bad credit car loan, you’ll
go far whatever you’re driving.

About The Author: Joel Walsh has written more tips on how to
get a car loan with bad credit:
http://www.cars-autoloans.com 

Content Courtesy : choosetoprosper.com