Getting approved for auto financing can feel overwhelming–especially if your credit score isn’t perfect. Here’s the good thing: You can get a car loan regardless of your credit score. You can improve your chances to get approved, whether you have good credit, have a recent financial setback, or no credit history.
1. Understand Your Credit Score Before You Buy
It’s crucial to understand your current financial situation before you begin shopping for financing. You should check your credit report to see what lenders will be looking at when reviewing your application. Get a free report from one of the three major credit bureaus, Experian, Equifax and TransUnion, once a calendar year. Or, use credit monitoring software.
Look for mistakes that could be affecting your score, such as incorrect account information or debts that were already paid.
2. Budget realistically
Lenders are looking for a guarantee that you will be able to pay back your loan. Calculate how much you can comfortably pay each month before applying. Calculate a monthly amount that will not strain your budget.
Budgeting helps you to be realistic in terms of what you can afford, and it shows the lender that you are financially responsible. Don’t just consider the payment for your car. Also, don’t forget to include insurance, maintenance and fuel costs.
3. Savings for Down Payment
A down payment can be a huge help, especially if you have a bad credit score. A small down payment, even if it’s only a few hundred bucks, can improve your chances of approval and help you qualify for a better loan term or lower interest rate.
A down payment also shows that you are serious about your purchase and will invest your money up front.
4. Consider a co-signer
A co-signer will help you get approved if your credit score or credit history is low. Co-signers are usually family members or friends with better credit, who will take on equal responsibility.
A co-signer may help you get a lower interest rate or even be approved for a higher loan amount. Remember that you and your cosigner are both responsible for making the payments. If you miss one, this could negatively affect your credit score.
5. Find Lenders who work with all credit types
Not all lenders assess applications in the same manner. Some lenders focus on helping borrowers with good credit while others are more focused on those with poor credit.
Shop around for dealerships and lenders who can work with your credit profile. For example, many Certified Carfax Dealers have relationships with lenders that offer flexible financing options to customers with less than perfect credit.
Final Thoughts
You don’t need to let your credit score stand in the way of getting you into the car that you want.
Check your credit report first, then create a budget that you can adhere to. Save for a downpayment and consider a cosigner, if needed. Find lenders who are willing to help you and understand your situation.
You’ll be in a great position to drive off with confidence and with financing that suits your budget if you follow these simple steps.
This post was written by a professional at Redemption Auto Sales. Redemption Auto Sales is a trusted used car dealership located at 11001 Seminole Blvd in Largo, FL. Serving Pinellas County, they offer a wide selection of quality used cars, trucks, SUVs, and vans. As a certified Carfax dealer, every vehicle comes with a detailed history report. They provide flexible financing, accept trade-ins, and are committed to a hassle-free, no-haggle buying experience. Visit https://200autos.com/ or call (727) 200-2468 to learn more.