Have bad credit and still need a car? There are ways to make it happen that won’t break your pocketbook and can help you improve your credit at the same time.
Most important, know your credit report for yourself. You can get your credit reports for free from AnnualCreditReport.com and see what is on listed there. If there is anything you disagree with, fix it and wait to purchase a car until it’s fixed. Directions to fix the mistakes are online, just read and follow the steps.
Shop around when searching for the best deal from lenders. Some lenders will see your poor or improving credit as a sign that you’re worth taking a chance on while others will see you as high risk. That’s why it’s important to get more than one offer from a lender.
Talk to your bank or credit union first. They know your situation and can see firsthand what your bank account looks like every month. They might not be the best deal but once they approve you, you’ll have the confidence to look elsewhere if needed.
When talking to lenders and dealerships, take a person you trust along with you. It helps to have an extra set of eyes to help you work through the numbers as well as stay focused when you get giddy with new car excitement.
Look for the cheapest money, the lowest APR over the shortest period. Don’t get distracted by promises of a lower payment over a longer period of time. Do the math in your head of how much that vehicle will eventually cost you and ask yourself “is it worth it?” Remember that you’re working your credit score up right now, not driving your dream machine.