• Skip to main content
  • Skip to primary sidebar

Auto Trends Magazine

Car reviews, industry news, & advice.

You are here: Home / Ownership Experience / How to Get a Bad Credit Car Loan

How to Get a Bad Credit Car Loan

June 6, 2012 by admin 3 Comments

If you want something badly enough, such as a bad credit car loan, you can usually get it. That can be a good thing. Then again, it can also be a bad thing. It depends on what you want as well as what you need.

Let’s face it: many of us need a car. With more than 250 million registered passenger vehicles in the U.S., car ownership for people of driving age goes beyond being a mere privilege. It becomes a conveyance of survival for many of us.

Bad Credit Car Loan

money funnelBuying a car means taking out a loan unless you’re blessed with thousands of dollars of spare money to pay for a new or used vehicle. Very few people can pay cash for a new car and with used car prices costing a mint, even most late model used cars are financed too. If your credit is good, then you should be able to get a loan. If your credit is bad, don’t fret: there is usually a lender willing to extend to you a bad credit car loan, but for a price. Read on to learn how you can avoid getting ripped off.

1. Check your credit score.

Your credit is bad, but just how bad is it? How do you know for certain? Well, the main thing you’ll want to know is that lenders will be looking at a three-digit number representing your credit score. If that score is low, say at 598 or below, then you’re in sub-prime territory or what is known as a “bad credit” score. You can obtain your credit score through MyFico.com. If your score is below 700, then repairs may be in order. If it is below 600, then you’ll need to pay careful attention to the next several steps as you shop for a bad credit car loan.

2. Obtain your credit reports.

Three credit reporting companies have dossiers on you. Specifically, credit information on who you are, where you work, how much money you owe lenders, whether you make your payments on time or not, and other information. Those credit reports are produced by three credit reporting bureaus: TransUnion, Equifax and Experian. Each company, by law, is required to give you one free copy annually of your credit reports. The FTC mandates this, but you can only obtain your free copies by visiting AnnualCreditReport.com for that information; otherwise you’ll pay for them. Head over to that site, put in your information and obtain your free reports.

3. Review your credit reports.

You’ve done so well following what I’ve said so far, but don’t lose focus now. That’s because you’re going to need to *very carefully* read all three credit reports and look at the information the credit bureaus have on file about you. Guess what? There is a good chance that some of that information is not correct. Guess what again? Incorrect information can lower your credit score. What to look for: wrong addresses, outdated job information, paid off debt that shows balances outstanding, accounts supposedly belonging to you that don’t, and more. You’ll need to contact each bureau individually to point out their mistakes, a move that will trigger an audit on their part. With 30 days to respond, the credit bureau can fix your mistake or contest your findings. If they choose to do neither then that information must be removed from your report automatically.

4. Apply for a car loan.

Wait 60 days after notifying the credit bureaus of possible mistakes or disputes before applying for credit. This will allow your updated information to be processed and should raise your credit score accordingly. Good places to apply for a car loan include your bank or credit union. Fill out your car loan application and give it to a lending officer.

5. Consider alternative financing sources.

If your bank or credit union turns down your car loan because of bad credit or the double-digit interest rate seems too high, then you’ll need to look for alternative places to apply for a car loan. If you make multiple loan applications within a month, it will only count as one inquiry by the credit bureaus. Still, you don’t want to waste your time with too many lenders so seek out companies that specialize in bad credit car loans. We don’t endorse any particular lender, but Drive Time, BlueSky Auto Finance, Federal Auto Loan and Fidelity Auto Loan are among the lenders that provide bad credit car loans and other financing. Choose one, make application, and if approved, make sure you understand the terms of the loan before signing your contract.

Lending Cautions

Bad credit means a few things: you’ll have a more difficult time obtaining a car loan and the interest rate you’ll be charged will be higher than what someone with good credit receives. You can reduce your monthly payments by putting down a larger down payment. Also, if someone is willing to cosign you loan, you may be able to avoid a high interest rate loan completely. With a co-signer on your loan, that person assumes risk if you default and your car is repossessed.

See Also — How To Obtain a Bad Credit Car Loan

Filed Under: Ownership Experience Tagged With: BAD CREDIT, bad credit car loan, CAR LOAN, CREDIT BUREAUS, CREDIT REPORTS, CREDIT SCORES, DEBT, Equifax, Experian, TransUnion

About admin

Matt Keegan has maintained his love for cars ever since his father taught him kicking tires can be one way to uncover a problem with a vehicle’s suspension system. He since moved on to learn a few things about coefficient of drag, G-forces, toe-heel shifting, and how to work the crazy infotainment system in some random weekly driver. Matt is a member of the Washington Automotive Press Association and is a contributor to various print and online media sources.

Reader Interactions

Trackbacks

  1. How To Obtain a Bad Credit Car Loan says:
    November 6, 2016 at 3:39 pm

    […] with bad credit can obtain a car loan and usually without a co-signer. If someone agrees to co-sign your loan, it […]

    Log in to Reply
  2. What Your Dealer Won’t Tell You About Car Financing says:
    November 6, 2016 at 3:59 pm

    […] you your actual credit score, but some could supply a different score effectively putting you in a bad credit car loancategory. Thinking that you won’t get financed and therefore be without a car, you agree to the […]

    Log in to Reply
  3. Automotive Leasing and Lending Continue to Rise says:
    July 4, 2017 at 3:58 pm

    […] with less than stellar, even bad credit, can often qualify for a lease or a car loan too. For new cars, 27.45 percent of loans were […]

    Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Recent Posts

  • Peugeot May Not Return to the U.S. Market After All
  • Next-Generation Sedona Minivan Will Be Renamed the Kia Carnival
  • GM Launches BrightDrop, Its Commercial EV Brand
  • The Refreshed and Handsome
    Lexus IS 350 F Sport
  • What We Know About the All-New 2021 Jeep Grand Cherokee L

Recent Comments

  • Fiat Chrysler Peugeot: Now What? — Auto Trends Magazine on Peugeot May Not Return to the U.S. Market After All
  • Peugeot Prepares for its U.S. Return — Auto Trends Magazine on Peugeot May Not Return to the U.S. Market After All
  • Peugeot May Not Return to the U.S. Market After All — Auto Trends Magazine on Stellantis Logo Revealed by Peugeot, Fiat Chrysler Ahead of Spring Merger
  • Peugeot May Not Return to the U.S. Market After All — Auto Trends Magazine on What We Know About the All-New 2021 Jeep Grand Cherokee L
  • Peugeot May Not Return to the U.S. Market After All — Auto Trends Magazine on Peugeot Prepares for its U.S. Return

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008

Categories

  • Auto Parts
  • Auto Shows
  • Automotive Career
  • Automotive News
  • Book Reviews
  • Car Tips
  • Classics & Discontinued Models
  • Commentary
  • Commercial Vehicles
  • Concept Vehicles
  • Dealers
  • Engineering & Technology
  • Fleet
  • Fun News
  • Maintenance & Repairs
  • Motorsport
  • New Car Reviews
  • New Models
  • Ownership Experience
  • Product Reviews
  • Special
  • Specifications
  • Uncategorized

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

New!
Check out our Jobs Board!

via GIPHY

Subscribe to Auto Trends

Subscribe in a reader

Social Media

Visit our social media pages:
Facebook
Twitter
Google+
Pinterest

Where is Matt Currently Published?

The Carolinian (new car reviews)
NAPA Know How Blog
On the Road Again

Pages

  • About
  • Authors List
  • Automotive Brochures
  • Contact
  • Industry Jobs
  • Write
    • Style Guide

Categories

Recent Posts

  • Peugeot May Not Return to the U.S. Market After All
  • Next-Generation Sedona Minivan Will Be Renamed the Kia Carnival
  • GM Launches BrightDrop, Its Commercial EV Brand
  • The Refreshed and Handsome
    Lexus IS 350 F Sport
  • What We Know About the All-New 2021 Jeep Grand Cherokee L
  • The All-New and Formidable 2021 Nissan Rogue Crossover
  • Fuel-Efficiency and AWD Champion: 2021 Toyota RAV4 Hybrid
  • Midsize Performance Master: 2021 Hyundai Sonata N-Line
  • Performance Hatchback: The All-New 2021 Mazda Mazda3 Turbo!
  • NACTOY Finalists For 2021 Offer Familiar and Futuristic Choices
  • Super Trooper: Nissan Titan Pickup
  • Behind the Wheel of the Popular 2021 Toyota Corolla Sedan
  • Lucid Motors Completes Arizona Factory
  • A Robust Turbodiesel Comes to the Chevrolet Silverado 1500
  • Mid-Engine Masterpiece: The Eighth-Generation Chevrolet Corvette Stingray
  • Compact Performance:
    2021 Cadillac CT4-V
  • All-Wheel Drive Supplies the Nissan Altima With a Competitive Edge
  • Return of the Toyota Venza!
  • Lexus Brings a Convertible to the Gorgeous LC 500 Line
  • Stellantis Logo Revealed by Peugeot, Fiat Chrysler Ahead of Spring Merger
  • Preview: 2021 Nissan Rogue Crossover
  • How to Fix a Broken Rivian Vehicle
  • Cadillac Gets Most Things Right
    With the XT6 Crossover
  • The High Potency Dodge Challenger SRT Hellcat Redeye Widebody Coupe
  • The All-New Chevrolet Trailblazer Forges Urban Paths
  • The Small Infiniti QX50 is Big on Tech and Engineering Features
  • Toyota Brings the TRD Treatment to the Midsize Camry Sedan
  • The Kia K5 Outclasses Most Competitors, Including the Departing Optima
  • Can the Toyota RAV4 TRD Off-Road Handle Tough Terrain?
  • Subaru WRX Showcases Its Performance Chops
  • Infiniti Overhauls QX80 Trims and Makes This Important Safety Feature Standard
  • Ford F-250 Super Duty and a Trail-Stomping Tremor Package
  • A Cut Above: Mazda’s Mazda3
  • The Highly Efficient Hyundai Ioniq
  • Volkswagen Atlas Revels in its Strengths
  • General Motors Deepens Partnership With Honda, Takes Stake in Nikola
  • Smart Concept: Jeep Grand Wagoneer
  • More Than an Encore: Buick Encore GX
  • Got a Recall? There’s an App for That.
  • Refreshed Nissan Titan Makes Its Case
  • BMW M235i: Not Your Typical Coupe
  • Hot Stuff: Lexus RC F Sport Coupe
  • Will the Electric Vehicle Boom Create New-Found Dependencies for Foreign Minerals?
  • Rumors? We Got Them!
  • About Bollinger Motors, EV Startup
  • Raptor Fighter: Ram 1500 TRX!
  • White Space Wonder: 2020 Nissan Rogue Sport
  • About the 2021 Genesis GV80
  • The Toyota Supra Gets a Four-Cylinder Engine and We’re Simply Gobsmacked!
  • Jim Farley Appointed Ford President and CEO
June 2012
S M T W T F S
 12
3456789
10111213141516
17181920212223
24252627282930
« May   Jul »

Copyright © 2021 · News Pro on Genesis Framework · WordPress · Log in