Before taking out any kind of loan, you first
need to understand what credit means or how it can influence the results of
your application. Each individual gets a credit rating from credit bureaus,
such as Equifax, TransUnion, and Experian. The job of these credit bureaus is
to keep tabs on a debtor’s creditworthiness. They score debtor’s based on
certain information revealed through their record, such as their ability to pay
on time, their existing loan, and if they have any encumbered or mortgaged
property.
If you’re going to take out a loan, lenders will
want to see your credit profile to determine if you are creditworthy. Remember
that lenders are businesses, too; they want guaranteed return on their
investments. Having a credit rating of less than 600 will put you in the bad
credit category. There are a number of factors that can lead to it, including
bankruptcy, foreclosure, defaulting on loans, late or missed payments, or even
having little to no credit.
How to Get
a Car Loan with Bad Credit
In case you do get a bad
credit rating, don’t worry. This shouldn’t automatically
disqualify you from applying for an auto loan. You will, of course, have to
work harder to prove to them that you are a worthy cause.
Don’t Make Things Worse
You cannot magically ramp up your credit rating,
but you can prevent it from plummeting further by simply avoiding entering into
more problematic transactions or missing any more payment dues.
Work at Improving Your Credit
Once you’ve plugged the leak, you can start
improving your credit little by little. You can do this by clearing off past
dues like phone and credit card bills. Again, they’re not requiring you to be
absolutely debt-free; they just want to see that you can handle the
responsibility of having another financial obligation to your many existing
ones. You can also dispute any errors you find in your credit report.
Compute for the Car Rates
When looking at car options with a bad credit,
it’s important to keep in mind a realistic assessment of what you can afford to
buy. Don’t go buying a brand new car because, obviously, you can’t afford it
just yet. Meanwhile, when you go for a second-hand one, always take a good look
at the rates being offered. Don’t get blindsided by lower down payments because
the truth is that putting down a bigger down payment on your car loan will make
the monthly amortization a lot cheaper as compared to when you have a lower
down payment.
Work with Your Dealership
The great news is that there are car dealerships
out there in Portland Oregon, like McLoughlin Chevrolet, that are happy to
offer financing services for clients who need auto loans for bad credit. It would help to work
closely with companies such as McLoughlin Chevrolet that can properly guide you on what to do. Get
better chances at having your auto loan approved even with bad credit with help
from trustworthy dealerships.
About
McLoughlin Chevrolet:
At McLoughlin Chevrolet, we know the importance
of having your own car. We also know for a fact, however, that not everyone
feels confident applying for a car loan because of bad credit. That is why
we’ve made it our mission to not just offer you quality cars, but also
professional assistance for all your financing needs.
Sources:
12 Tips
for Buying a Car with Bad Credit. TheBalance.com.
Bad
Credit Auto Loans.
DMV.org.
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