That’s right. This is all about taking the glass is half full perspective, rather than the glass is half-empty or worse: there is no glass. Granted, trying to manage your day-to-day finances when you have bad credit can feel like a pretty hopeless situation and the idea of finding a car loan with bad credit feels on par with a snowball’s chance in hell.
But, recast in a different light, you might see how it’s actually an opportunity. Credit is a changing, fixable reality. Just because you’re wrestling with bad credit now doesn’t mean you always will. It’s not a sentence – again, it’s a chance to right the ship and start sailing in the direction you desire.
With an attitude adjustment and a little light shed on a new perspective, you’ll soon see how your bad credit situation is just winning situation in disguise. Keeping in mind a few key hints about how to find a car loan when you have bad credit will help you feel more in control of your finances than you probably have in a while.
Hint One: Preparation is Key
Before you start scoping out used car lots and inventory that you think falls within your price range, do a little leg work. Find out exactly what your credit score is and then go a little deeper. What’s the story behind your score? In other words, what in your credit history created the score you see before you? The top three credit agencies: Experian, Equifax, and TransUnion, provide a complimentary credit report on an annual basis. Request your copy and then set to work locating any black marks – late payments, missed payments, or other credit sins, that are compromising your credit score. What you’re really looking for here is a chance to right a wrong. Sure, some of these black marks might be completely accurate and belong on that report. But, human error exists everywhere. Better to double check and make sure that you’re not getting dinged without reason. Once you feel secure in your report and understand what your credit score reflects, it’s time to start planning for your purchase.
Hint Two: When the Door Closes, Find a Window
In your case, the door has already closed, right? You’ve got bad credit. You can’t secure a favorable loan term with the same ease as a consumer with good credit. So, you need to give yourself a window. A window of time. Let’s say three months, depending on how soon you actually need this car and how much damage your credit report evidences. Use this window – however long you determine it should be – to pay bills on time, clear off debt, and generally engage in good credit practices to smudge out some of those black marks and start boosting your credit score. It actually doesn’t take long to address the damage and start strengthening your credit condition overall.
Hint Three: Shop Around, Like Mama Said
Seriously. We’re not just talking about shopping for your car – we’re talking about shopping for your financing. A good rule of thumb is to start by approaching those lenders you already have some connection to, whether it’s a checking account at your local bank, or your mortgage at a credit union. Consult with them first because they know you and will have a more complete picture of your financial situation.
While you will likely face a higher interest rate than good credit consumers – say anywhere from 10-13%, there is no reason you should feel gauged or otherwise unfairly penalized by your lender. More people than you might suspect are in your shoes, or some other worn out version of them, and increasingly lenders must be competitive with respect to approving loans for consumers with bad credit. Be your own advocate and know your worth – literally.
Heed these three easy hints and we can guarantee that you’ll soon make progress with respect to your credit and your future car buying possibilities.