Can I Buy a New Car with Bad Credit?

July 22nd, 2015 by

Few things are as exciting, yet often frustrating, as buying a new car. But the experience is all the more daunting if you find yourself struggling to secure car loans for bad credit.

If your credit has tanked and you’re stuck with a low credit score, don’t worry. You can still buy a new car with bad credit.

Here are some things to keep in mind…

Before You Shop, Double Check Your Credit History

This is a numbers game and knowing your credit score before you even consider shopping for a new car is crucial. You’ll want to verify that the report is accurate and clean up as many inconsistencies as possible before you consult with a car dealer.

Once a year, you are entitled to free reports from the three major credit reporting agencies: Equifax, Experian, and Transunion. Review each report and fix any errors you find by using the online tools featured on your Annual Credit Report.

Find out what your credit score is, and remember the higher the number the better. FICO scores range between 300 -850, with 850 representing impeccable credit. Those consumers with higher credit scores enjoy far lower interest rates than those with poor scores.

Be a Smart Shopper

Do not be lured into bad business deals or shady loan agreements with dishonest dealerships. Some of these businesses will get you to sign a loan that you will surely default on in a matter of months or weeks.

They will then repossess the car, garnering a big fee, which is often the primary and surefire source of income for these dealers.

Only do business with a legitimate dealership which will offer you a high-interest loan, but one that you can manage.

Help is Available!

Check out some nonprofit groups which specialize in personal loans for all manner of purposes, from buying a car or clearing off a high-interest credit card. These lenders are backed by the United States Treasury as CDFIs, or Community Development Financial Institutions.

Find yours today and consult with a specialist about securing your own personal loan to help you purchase a new car and rebuild your credit.

Start Rebuilding Your Credit Ahead of Time

Depending on how soon you need a new car, try your best to start rebuilding your credit before you start shopping or consulting with dealerships. The more you can boost it before your purchase, the better purchasing power you’ll have, with more favorable loan terms and interest rates.

Do not feel discouraged and remember that bad credit can be fixed over time. It isn’t a permanent condition and you do have the power to change it.