Having bad credit may not be something you may consider on a daily basis. However, this becomes an important issue when sourcing for credit or other finance if you have a low credit score, especially if you intend purchasing a vehicle. Getting a car is necessary for daily or regular movements, which include commuting to work, shuttling your children to and from school or training centres, purchasing items from the grocery store.
At some points, you will need a new vehicle. This could be as a result of your current car permanently breaking down or you being tired of spending money on repairs. Prior to getting a new car, you may have been saving all along. However, not everyone has enough savings to cover the entire cost of a brand new vehicle. For example, how long would it take you to save $40,000 for a new sedan, especially when other expenses are factored in?
Hence you may need some sort of financing to get a new vehicle. This would require you to have a good credit score. Albeit, how feasible is it getting a car with bad credit? In this article, we will discuss how this can be achieved.
Analyse Your Current Credit Report
Before buying a new car, you need to understand the situation of your current credit. How good or bad is it? Going through your credit report and credit score gives you an idea of where you financially stand and how your credit will be viewed by lenders.
You can get your report freely from the three main credit report bureaus, namely, Experian, TransUnion, and Equifax. Once you have received your report, check to discover if there are negative items documented in it. Also, look out for discrepancies in each of those reports.
Know Your Credit Score
Another area to look into is your credit score. This score is used to determine your eligibility for car financing. Most creditors use FICO score; however, VantageScore can be used as well. This scoring system was created by the major credit bureaus.
If you have no idea what your FICO score is, you can check in with your bank or credit card company for information on that. If you cannot access this for free, then you may need to pay a token. Knowing your score helps you make the right financial decision.
Should your credit score be lower than expected, you can boost it to get the desired result. In a situation where you have a short or no credit history, you can be added as an authorized user to your relative’s old credit card. Doing so will increase your credit history.
Ensure That Your Loan Is Approved Before You Visit The Dealership
It is ideal to get a pre-approved loan before checking out any dealership of your choice. This saves you from being caught up in loan offers from insurance managers that are not in your best interest. Also, you can estimate your budget and know what type of interest rates you are eligible for.
If you would like to know more about how you can access car loans, please visit this link: credit.