Unless you live near a major source of public transportation such as a train station or a bus station, in order to be a functioning and active member of society today you pretty much need a car. In fact, next to having a safe place to rest your head and having food on the table, automobile ownership is right up there at the top of most people’s list of necessities.
However, it can be very tough to qualify for auto financing if you have a low FICO (credit) score. The FICO scoring system was created by Fair, Isaac and Company. It is essentially a formula for determining your credit score. Each of the major scoring agencies like TransUnion, Equifax and Experian leverage the same formula to calculate your score, based on factors such as the amount of debt you have and how timely you tend to make payments.
If you have a FICO score below 600 and are looking for a bad credit auto financing car dealer, here are 5 steps to finding a good one:
1. Avoid visiting any lenders in person without having a plan first:
You may have a bad credit lender in your neighborhood to ask for a loan – likely sandwiched between a couple of used car dealerships. However, avoid just walking into their office to apply for a loan without a plan. If you do, you are likely to qualify for a loan at an interest rate that is higher than what you could otherwise get.
2. Find at least 5 bad credit auto financing lenders online:
Do an online search and find at least 5 viable bad credit auto financing car dealers that advertise as being those that work specifically with bad credit individuals.
3. Do 5 minutes of online research on each one to make sure they are reputable:
Now, do a little bit of online research about each lender on discussion boards and chat rooms. Make notes about any comments – either positive or negative – that you find there.
4. Run your free credit report and get to know it well:
Now, run your credit report (you can get a free copy once per year) and become very familiar with everything in it. Be ready to talk about any negative items you see there with your lender.
5. Apply to 3 or more of the lenders on your list to increase your chances of getting the best rate:
Applying to more lenders improves your chances of finding the very lowest interest rate for your car financing loan.
Take these 5 tips into account as you find a bad credit auto financing car dealer.
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