Friday, October 19, 2012

Read These Tips On How To Secure The Best Car Loan Possible With A Bad Credit History

It is quite difficult for people with bad credit to get a car loan, but it is not impossible. Some finance firms specialize in issuing loans to automobile buyers with previous financial problems. However, they end up paying a higher premium. You can qualify for an auto loan with favorable terms if you are willing to clean up your poor credit as soon as you can and apply for finances from reliable money lenders. Here are some tips on getting car loans for bad credit.

Review your present current status

Even if your credit rating is poor, it is advisable to check the details by requesting for credit reports from relevant credit bureaus. These credit agencies compile yearly credit reports and give out free reports as stated by the law. By understanding your credit position, you will easily find local dealerships to assist you get a car whether it is second hand or new.

Find out if there are mistakes in your credit report

Go through the bad credit entries to check for mistakes. Credit bureaus may make mistakes when recording and reporting information. You might have charge offs or delayed payments, but the agencies might have made errors in the entries or listed the dates wrongly. The law allows you to dispute any erroneous reports and demand the bureau to correct anything erroneous. After the dispute is resolved, you will be able to qualify for a loan since you will have a new credit report. Chances of qualifying for car loans for bad credit will increase with the removal of any negative item.

Save cash for down payment

Most lenders and auto dealers require a minimum of ten to twenty percent as down payment of the car's cost. Therefore, saving some cash for down payment can reduce your monthly installments. Alternatively, you can dispose of an old vehicle and use the money to make the down payments.

Compiling all the relevant documents

You will require some documents after submitting the application online. These may include tax return forms, mortgage or rent payment information, bank info and check stubs. Having the most current information will help turn your pre-approval status to approved. Hence, get all the documents you require to speed up the approval process.

Keep rebuilding credit

Once your bad credit loan is approved, you will be a step ahead in rebuilding your credit. This is through making monthly payments on time. Moreover, you should aim at removing any small item that is affecting the credit report.

Look for alternative financing sources

You should look for other sources of finances if your first auto loan application is turned down. You can check online for various lenders willing to give you a loan even with poor credit. Nevertheless, you must be cautious as there are many illegal dealers who are out to defraud others. You can verify the reputation of a certain dealer by contacting the better business bureau in your state.

Another better option for those who are looking for car loans for bad credit is consulting your credit union. If you are a credit union member, you will be given top priority as they offer loans at subsidized rates than the ordinary money lenders.

If you made an application to the main high street lenders for a car loan a few years ago you would have been swiftly shown the exit. Now there are many loan for a car that will strongly consider your application such as who have helped thousands of people get the car of their dreams despite having a poor credit history. You should do everything you can to rebuild your credit history and this will be seen very favorably by most lenders. They realize that so many people have been affected by the recession and they will make reasonable allowances for this.

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