So, you have bad credit but still want to own a car. Many things can happen that can hurt your credit history. You may have defaults, fallen behind on some of your monthly payments, you name it. Unless you come from a rich family, these financial woes can happen to almost anyone.
Don’t fret! You can still get behind the wheel even if your credit score is less than perfect. There are several things you can do to get car financing and not let bad credit get in the way between you and the car of your dreams.
The road to a new vehicle may not be easy. But, with some effort and research, you can improve your credit and find a lender who can help you buy a car regardless of your past. To make life easier, here are practical tips for buying a vehicle while your credit is on the mend.
1. Take a close look at your current situation.
The very first thing you should do is to check your credit. Don’t assume that you have lousy credit because someone told you so. Just because you’ve had some late payments in the past doesn’t mean your credit is already bad.
One great way to check your credit score is to find out through national credit bodies, and the best thing about that is you can get a copy of your credit report for free.
2. Before you go car shopping, get your act together.
After checking your credit report, do your best to improve your credit. If you want to increase your chances of getting your car loan approved, clean up your credit history. Try to pay off your past due accounts and dispute any errors that may appear on your credit report.
Think of it this way, you’re applying for an auto loan. By putting your best foot forward, lenders will be more confident in the fact that you can make your car repayments and will be more inclined to take a chance with you.
3. Be on your best behaviour.
You’ve worked hard on improving your credit rating. So, don’t let all your efforts go to waste. In the time leading up to your auto loan application, avoid taking on major credit obligations, like having new credit cards or late payments. If you stay on your best behaviour, you avoid raising any potential red flags that will alarm an auto lender.
4. Don’t spend more than you can afford.
Always check your budget and stick to it. Many people make the mistake of taking on a better car that they can’t really afford. Know how much money you have left after paying all your monthly bills. The amount left is what you can afford to pay. So, do your best to not go over your budget even if you’ve been preapproved for an auto loan.
5. Make your paperwork work in your favour.
Before you even set one foot into the auto lender’s office, get all your important documents in order.
This paperwork, like proof of income, utility bills, among others, will help establish that you have a job, a good source of income, and capable of making your future car payments.
By showing that you are financially capable of making your car payments, these lenders will be more than happy to help with your car financing.
Once you’ve done all the legwork and ready to apply for a car loan, you’ve not only improved your credit history but also gained one step closer to getting your dream car.
Want to read more? You may like:
- What to Do In Case You are Rejected for a Loan
- How to Fix Your Bad Money Habits
- 4 Ways Credit Cards Affect Your Credit Score