I need a car but I have bad credit

The second largest purchase made by people in their life is an automobile. With an average value of a few thousands of dollars, this is not something you buy whenever you get a paycheck. But sometimes you just don’t have the time to wait and save up money. In those moments when you can’t afford to pay cash for a car you need to get a lender to finance it. To qualify for an auto loan usually you need good credit. But lately it seems that more and more people are saying: I need a car loan but I have bad credit. If you need to get a car, don’t let poor credit rob you of a good deal. Even with less than perfect credit score, anyone can still negotiate for a better deal. Let’s see which are the factors that influence the lender’s response.

How can I get a car loan with bad credit?


The main element involved in the interest rate on your car loan is the credit rating. Bad credit can mean anything from making late payments on your credit cards, bankruptcy and delinquent payments. Each one has a different impact on the credit score. What makes it almost impossible to get a car loan with bad credit, and these are things you definitely need to stay away from, are serious troubles like bankruptcies, foreclosures and repossessions.

You can verify exactly what negative information is on your report by checking your credit report. Mistakes are often made, and unfortunately they can drag your score down. If you should happen to discover errors on your report you can dispute them through the credit bureaus websites. If the credit bureau can’t verify the errors within 30 days they have to delete them from your record. With this move you could raise your score and qualify for an auto loan.

All lenders, not only those specialized in car loans for people with bad credit, analyze carefully your job history. Mainly, how long you had a job. A good record can really open up doors for you.

To get approved for a car loan with bad credit, your month-to-month revenue should reach $1500 or above this sum. Something less will give you a hard time.

How much you owe in comparison with your revenue is called debt-to-income ratio. If your debt is greater than your income, you are in an “upside down” state. In this situation your chances of getting approved are almost zero. You will need to work with hard dedication to reverse the state and improve your debt-to-income ratio.

When looking for a car loan for people with bad credit you normally should come up with 10%-20% of the acquisition value as a down payment. The more, the better! With a big down payment you have definitely increased your chances. The bigger the deposit, the smaller the monthly payments and the interest rate.

When you need a car and have bad credit, references can be of great value. Before applying, make sure you can present 8 to 10 strong references, people that you’ve met and known for a minimum of a year. It would be great if you come with both personal and business references. It’s what lenders typically call third party verification. Because other people will vouch for you, you become trustworthy and gain more credibility.

Where can I get a car loan with bad credit?


Getting a car loan with bad credit is what you want, but you may also want to avoid any bad business. If you find a lender willing to work with you, don’t jump head first, but make a few inquiries. Start with the Better Business Bureau and check if there are any complaints about your lender. Afterward, you should find out if there is a customer service line. If you intend to apply online, don’t send out your private information without verifying the company first. Avoid lenders that charge pre-approval fees. It’s a clear sign you are facing someone who just wants to make a quick buck.

When you meet a potential lender, come to the appointment prepared. Write down the notes you took while doing research and making comparisons. Politely explain the circumstances that caused your current credit and mention the fact that you are active in improving your credit. To get a car with poor credit you must exercise a little diplomacy. You have greater chances of getting a better deal, in spite of your bad credit, if the lender sees that you are doing your best to protect your personal credit.

If you have a credit so bad that no one is willing to approve an auto loan, then you must find a co-signer with good credit. You will be granted the loan based on the co-signers credit, but you must be aware that missed payments or default will damage both your and your co-signer’s credit.
In closing: can you get a car loan with bad credit? As you can see, it’s possible, but you have to do a little work.


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