You have your eyes set on the ravishing red Mustang and you are obsessed with its curves. The curves like no other, curves which could beat JLO in her prime and you canâ€™t contain your frenzy but obsess about your dream wagon.
Spoiler Alert: Life isnâ€™t all sunshine and rainbows (sounds familiar?), your credit score could soon burst your bubble. In that case, you would come full circle and get stuck on the same paradoxical question â€“ how to finance a car with bad credit?
Well, as per the widely held conviction among the masses, you are forbidden to dream of having a new car if you have a low credit score. There is some truth to this statement, but thatâ€™s not the apparent truth because there is a silver lining (there always is no matter what begets you), and you can always finance a car with bad credit score, provided you are willing to do some hard work before going for financing a car.
Read more:Â Guide to Getting the Best Auto Loans
You have to bear in mind that the whole auto industry works on trust. Lenders trust borrowers with high credit scores way more than they trust borrowers with poor credit score because there is no denying that a personâ€™s credit score is a good reflection of how he/she has been living up to his financial obligations over the years; a good factor to establish creditability.
Another hard truth which you need to digest if you are seeking an auto finance with bad credit score is that you canâ€™t expect the heavens to open their bountiful treasures for you , your bad credit score will have its implications all through the process (what comes around goes around) and that it is most likely to translate into higher interest payments for your auto loan.
The answer to this question is subjective and it varies depending on various factors such as; Whatâ€™s oneâ€™s credit score? What is the complexion of oneâ€™s credit history?Â What is the car a person is eyeing? How is the current auto finance market setup? And where to look for an auto finance while bearing the tag of bad credit store etc.
Sounds humongous, isnâ€™t it? Chill, EBC has got your back, as always ðŸ˜‰ and we are going to break it down for you so that you can formulate your own action plan after contemplating what will work out best in your case.
1. You know what credit score is considered bad, right? So, thereâ€™s no point elaborating that same mundane stuff and making you acquainted with the categorical division of credit scores.
Instead, you should be more curious to know why your credit score is poor and what all repercussions it is causing you and what ramifications you ought to avoid.
2. AnnualCreditReport.com is the only legit site that is authorized by the federal government to provide you the credit report. You may find similar other sites on the internet but they all are a hoax because they will have you enrolled for credit monitoring services besides charging you extra money.
3. Peruse your credit report thoroughly and know what your pain areas, whether you miss out on your payments frequently or is it your credit utilization ratio which is reaching for the skies?
Try and improve your credit score by 200Â (on your own) at least to whatever extent you can.
4. Itâ€™s important to dream big but itâ€™s more important to be practical. You have to curb your temptation of driving around a GT or a gigantic American muscle not because you canâ€™t have one but because itâ€™s not good for you in the long run.
Moreover, there are predators who are looking for people with lousy credit score to give you the loan with the underlying intent of entrapping you in their web of selfish motives. Remember, auto loans are usually backed up with collaterals and in case you happen to fail in fulfilling your financial obligations, all you earlier monthly payments will go in vain besides having your collateral chucked out.
5. As we said, buying a firsthand car could leave you in deeper waters so the only feasible alternative to buying a firsthand car is refinancing a second-hand car. Having said this, there are certain inhibitions which people have about the second-hand cars and rightly so, you should go for a CPO certified pre-owned car which will spare you both the time and money which would have otherwise spent on its refurbishment and repairs.
Certified pre-owned cars are not the ramshackle vehicles which have been standing at the corner of your street, instead, they are quality-affirmed, fully functional vehicles which are as good as the firsthand cars.
6. Now, the question is, from where should you refinance your car if you are having a poor credit score? Autocreditexpress.com is the website you should be turning to. With almost 20 years of experience in refinancing (through a network of lenders) new and old model cars for people who have credit score constraints, Autocreditexpress.com could save the day for you.
It specializes in getting customers through the process of refinancing in cases of repossession and other delinquencies such as amid bankruptcy.
7. The loan application process for you could differ if you are a sub-prime borrower. Lenders may ask you for extra documentation like your bank passbook or employment experience and licenses pertaining to your profession particularly if you are a contractor.
This way, lenders will assess your debt to income ratio besides figuring out the probability of you making payments in time. There shouldnâ€™t be any active concealment of material facts from your side, otherwise, the lender may turn down your application or change the terms of the agreement.
8. In case you are turned down for an application, you donâ€™t have to see to it as an insult. In most cases, the lenders will tell you why you were rejected for instance because of an entry on your credit report. You should not in any case pay for the loan amount via a credit card because it will be like inviting your doom.
Instead, you should wait for a few months after you have wiped off some part of the debt that owed. This way your credit report wonâ€™t be affected because successive application rejections worsen your credit score.
9. Now that we have answered how to finance a car with bad credit, we would like to share another important piece of advice with you, a hack basically. After having completed 9 months to 1 year of loan term and having paid payments on time, your credit score would have improved tremendously.
Consider refinancing because you are likely to get a lowered interest on your car and more importantly will find loan term which is more stretched out and terms of the contracts which are more flexible
Visiting autocreditexpress.com wonâ€™t cost you a thing. It wonâ€™t show up on your credit report and who knows, you could find a bargain which you could have never thought of. Good things come to those who try.