Responsible and
hardworking adults always dread the words “bad credit score” because it sounds
very ominous. Having a bad credit score can affect many financial opportunities
in the future, and that makes it intimidating. A common misconception of most
people is that bad credit auto loans are always rejected, which hurts their current credit scores even
more, so they are reluctant to try. That is a myth because there are several
ways to get an auto loan, even with bad credit.
If you are in need of a
new vehicle, but your credit report isn’t looking good, here’s what you can do
to increase the chances for approval:
1.
Loan through a Car Dealership
There are two ways to get
access to an auto loan. One is through financial institutions like banks and
credit unions. This option often entails a lot of paperwork and credit checks
that can impede your chances of getting an approval. Another way is to apply
for a loan using a trusted car dealership in Portland. Car dealerships are more
lenient with their requirements and sometimes offer better deals for customers
with bad credit.
2.
Down Payment Plus Vehicle Trading
A great way to reduce the
amount of the principal loan for a new vehicle is to offer a down payment in
cash and also trade in your current car, if you have one. This will also
reinforce your commitment to making a deal that earns you plus points from the
point of view of the car dealership.
3.
Have a Co-Signer
Having bad credit or
worse no credit at all can make an auto loan difficult, even when you’re
already working with a car dealership. Sometimes there is no time to work on
improving current credit scores, especially when you are in dire need of a new
car. However, you can always find someone you trust who has good credit to
co-sign for the loan. This will increase your chances of getting the auto loan
approved significantly.
4.
Choose a Vehicle Early
A great way to increase
your chance at loan approval even with bad credit is to choose a vehicle before
approaching a dealership. How can this help? A car dealership or any lender can
perform a pre-qualification check on your credit. You will have a breakdown on
the loan terms to see if you can afford it. Best of all, a pre-qualification
check will not harm your credit score.
5.
Work on Improving Your Credit Score
Sometimes no matter what
steps you take, your bad credit will put a damper on the loan approval. This is
why getting your credit report early and doing your best to improve the score
before applying for a loan is a practical step. Simple things like paying off
credit card bills on time will bring up your scores.
“CHANGING
THE PERCEPTION OF THE CAR BUSINESS, ONE CUSTOMER AT A TIME” – YEON KIM (Sales
Manager at Mcloughlin Chevrolet)
Sources:
Bad Credit Auto
Financing, RoadLoans.com
3 Best Second-Chance Car
Loans for Bad Credit (2018), BadCredit.org
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