Let’s face it—bad credit happens. Due to often unforeseen circumstances in life, our credit can take a big hit even at no fault of our own. When someone who has access to your credit makes a mistake, you should not be the one who suffers.
Whether it comes from a bad breakup, unexpected loss of a job, or naïve consumer habits when you were younger, bad credit does not have to control you. When it comes to purchasing a new vehicle, there are ways to secure a loan to put you in the ride of your choice even when your credit is less than stellar.
Timing Is Everything
When it comes to getting an auto loan with bad credit, the timing of the loan can make all the difference. Through some easy and simple steps, any consumer can increase his or her credit score. Raising it to a level that avoids high interest rates, however, does take time.
There are ways to secure a car loan in less time, but this often means paying a much higher rate in order to offset the liability a lender takes on in securing the loan. Therefore, counting the costs before signing on the bottom line is critical to setting yourself up for financial success.
Know Your Score Before You Shop
Knowing the number of your credit score before you begin shopping will help you understand what to expect so that you are not caught off guard when the numbers come back. If you have a subprime credit score—typically between 500 and 600–then the rate on your loan can wind up being as high as 11% or more for a brand-new car and nearly 18% on a used vehicle.
These interest rates are dramatically higher than those on a loan involving lower credit scores. The average rate is closer to 5% for a new vehicle currently. Knowing how to shop for your loan and for your next vehicle, however, can make a big difference in the rate you receive.
Review Your Records
Looking over your credit history may reveal some mistakes that have led to a lower score than what is warranted. Disputing errors on your record is a fairly easy process and well worth the effort if it proves effective in raising your score. Fixing mistakes on your credit history is generally the quickest way to raise your number.
There are multiple websites where you can request a copy of your credit report, but make sure they are credible before submitting your personal information. Credit Karma is one such reputable checker and it will ping both Equifax and TransUnion consumer credit reporting agencies. Experian is the other of the big three. You can also go to each credit reporting agency’s website directly to report a free copy of your credit report periodically.
Along with taking time to build your credit score, saving up some cash for a down payment will also go a long way in lowering your monthly payment and make owning a new vehicle affordable for you. Not only does a larger down payment help you qualify for a loan, but it means paying less interest overall due to the smaller amount of money you are borrowing.
Convincing a family member or close friend to co-sign your loan can also make owning a new car possible even with bad credit. Depending on the credit score of your co-signer, your rate could be much lower over the life of the loan and allow you to put more of your money toward the principal cost.
Whatever your credit score, a large dealership like Charlie Clark Nissan Brownsville has the tools, knowledge, and connections to help you secure a car loan. Thanks to partnerships with a large variety of lenders, Charlie Clark Nissan Brownsville has options for putting you in a new or used vehicle today. Call our financing team at (956) 214-2500 or come by Charlie Clark Nissan Brownsville to learn more about affordable financing options even with a low credit score.