Auto loans for those
that have bad credit. learn more about these loans by reading below.
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Getting an Auto Loan with Bad Credit
Who is a subprime borrower?
People who have bad credit may not be
able to secure an auto loan from
their local lender easily because they
are considered subprime
borrowers. A borrower in the prime
category, on the other hand, will
find it less difficult. So what does a
person with bad credit do to
make sure he can get an auto loan?
First, you have to know that a subprime
borrower is generally someone
who has a credit score of less than 620.
Though many lenders refuse to
lend to such people, fortunately there
are still lenders who will. The
problem is, though, that the borrower
may have to accept the high
interest rates that come with their
subprime auto loan.
Check your credit report
There are other things you can still do
before you accept a subprime
auto loan as a last resort – for one
thing, you can check your credit
report for accuracy. There will be times
when erroneous information
enters your credit report which will
negatively affect your credit
score. If this happens to you, write the
credit bureau in charge right
away so they can correct it. You might
be qualified for prime lending
It is now possible for the ordinary
borrower to ask for his credit
score from the credit bureau.
Previously, only lenders were granted
this valuable piece of information. It
would help if you knew your
credit score so you will not be
uncertain as to the type of auto loan
that you can expect to receive.
Do not depend on auto dealers
Do not depend on the dealer to give you
a good car loan deal. Remember
that dealers are granted a percentage
from the loan they can get for
you from a bank or other lender. It is
best if you can ask a trusted
lender for the car loan even before you
visit a car dealership.
Shop around first
Do not accept the first loan that you
set eyes on. It is vital that you
learn to shop around and compare rates
and terms of various lenders
before you sign on the dotted line.
Lenders compete with one another by
offering loan packages that attempt to
top offers from other lenders.
It is useful to have these offers on
paper because you will find it
easier to compare the features of each
offer with the features of other
offers. Do you have an account with your
local bank? Many banks devote
whole departments to serve people with
bad credit histories, and they
are particularly eager to help those who
are currently loyal clients.
You might find that your local bank was
the right auto loan provider
Develop a better credit score
Many people feel dismayed when their
auto loan application is rejected
because of poor credit. Use an
accredited legal firm to help remove the
negative items on your credit
report. This is often referred to as
credit repair. However, your credit score is not cast in stone
– meaning, there is still time to
develop a good credit history so that
your credit score will eventually
improve. Start by paying bills before
or when they are due. Do not use your
credit card too much. People with
bad credit can expect to get a better
credit score in two to three
years this way.