Worried that your low credit score will sabotage all your chances of getting behind the wheels of your dream car? Well, here’s good news for you. Rising bad credit situations have naturally triggered a growing number of companies offering auto credit loans to people with iffy credit scores. These companies are making it easier for people to tread into places that were earlier restricted to them. Simply put, bad credit holders can now get into deals that were previously reserved only for those with a cleaner financial history. But is all this as easy as it sounds? Well, apparently, yes. To be frank, you do have to work around a bit, initially, but that’s mostly till you’ve found the right place to begin; that is, till you’ve come across the right dealer or lender.
Setting your record straight
Paying your loans on time and in full can help you to build your financial history from scratch. This can significantly improve your ratings. However, not all credit sources help you to do this. So, read on to find out which methods work and which don’t.
Loan first, buy later
Get a loan before you go to your dealer. Why? Because this’ll save you from stretching beyond your means. On the contrary, if you go straight to a dealership, there are chances that you might be wheedled into fixing a deal for a car that’s way more than you can afford.
Look for a place to start
If you are looking for auto loans for bad credit, there are plenty of options available for you, both online and offline. However, these three options would be the best in terms of safety and reliability.
- Direct lenders- Direct lenders might not work for all. In fact, these are better suited to those with slightly better credit score. Such auto credit lenders often go beyond the score to see what caused it in the first place. So, if your bad credit is a result of an accident or is a fleeting phase, you might score better with these types of lenders. Getting a loan from a direct lender also offers you a chance to improve your ratings.
- Car dealerships- You can find some car dealers offering auto credit loans. However, this happens mostly in the case of a used car purchase. In this situation, you need to repay your auto loan in small amounts over a short span of time, failing which, your car goes back to the dealer. Since car dealers rarely report financial details to credit bureaus, securing loans from them won’t show on your credit records.
- No credit auto loan- Start with a clean slate. This is by far the best way to begin since it gives you a scope to rebuild your financial records, albeit, the clean way. Let’s face it. No credit is better than bad credit. There are many legit companies that can help you secure an auto loan without a credit history. But, you need to stand true to your loan commitments, to get the most out of this method. Before choosing any of these companies, however, make sure to check your local Better Business Bureau for their ratings.
So, now you know that buying a car with a bad credit isn’t a tough cookie to crack at all. More importantly, remember to maintain a good borrowing habit in future to avoid finding yourself in a tight spot again.