A lot of people have bad credit, unfortunately. And when they want to get a car loan, they often struggle to get credit. In fact, there are many bad credit auto loans out there, but people still often get rejected for these. This is because they are not applying for them properly. Hopefully, the following information will ensure that you don’t get declined.
Choose Bad Credit Car Loan Providers
First of all, you should only apply with providers that actually specialized in offering loans to people with bad credit. This is why, before you apply for any credit, you need to find out what your current FICO score is. In so doing, you won’t apply with companies that will decline you anyway, as this makes your FICO score even worse. Once you know your score, go online to find the various providers that are able to provide people in the situation you are in a loan. Look for a number of things in particular when you compare the market, so that you can apply for the best deal. Some of the things to compare include:
- The rate of interest you pay.
- How often you have to make repayments.
- What the monthly repayments are.
- What the eligibility criteria are.
- Whether you get any extras such as free insurance.
How to Qualify
If you decide to apply for a loan, you should be pretty sure that you will be accepted. As stated, your FICO score will become even worse if you apply and get declined for credit. However, knowing that you meet all the criteria still doesn’t mean you will automatically be accepted. You would be surprised at the amount of people that do not complete all the necessary details, fill certain forms in wrong and more. A lot of people are also tempted to embellish their application slightly, for instance by claiming a higher income than they actually earn. This is a terrible idea, as the lender will find out about it. The effects of doing this on your credit report are significant, because more points will be deducted if you are declined by a company that specializes in bad credit.
If at any point during your application process, you are not entirely sure of what you are doing, contact the company through which you are applying for a loan. They will be more than happy to explain the process to you and to help you find out whether you have supplied all the information they need completely.
If you want to purchase a car on finance and you have bad credit, there are things that you can do. It is not recommended to simply ask your car dealer to sort it out for you, as they are likely to find the car finance company that is most suitable to their needs, not necessarily to yours. You are under no obligation to take their finance offer anyway, so make sure you do your own research first.