Many situations can get in the way of obtaining that perfect credit score. Even if you're on the path to improving your financial situation, you may still feel like your current credit score is holding you back. Unfortunately, few people can get by in day-to-day life without a car, and you may not have time to wait for your score to improve before taking out a new auto loan.
The good news is that your credit score doesn't need to be an anchor stopping you from moving on to your next vehicle. Even better, a new auto loan might help you bring that credit score out of the depths. However, getting the best deal on your loan might require a little more effort. These three steps will give you the best odds of getting a great deal on your next used car loan, even with imperfect credit.
Step 1: Stop Worrying About Specific Scores
It's easy to fall into a habit of believing that you need to obtain a particular credit score before you can apply for a car loan. While credit scores are important, your score is only one aspect of your overall financial picture, and it's not the only thing your lender will examine. Waiting for your credit score to cross a particular threshold often feels like trying to hit a moving target.
Instead, realize that many lenders and auto dealers are happy to work with you, regardless of your credit history or numeric score. If you need a car right now, waiting for your score to tick up a few points can ultimately cost you more money if you need to repair or maintain your current vehicle. Instead, the most important first step is to stop waiting and start the loan process.
Step 2: Cast a Wide Net
Since a lower credit score typically means a higher interest rate, used cars are often the best option. A used car will have a lower purchase price, reducing the amount you need to finance and the ultimate cost of your loan. Still, even when buying used, it's easy to become too focused on a particular make, model, or age.
Instead, cast a wide net and consider many different vehicles that may fit your needs. Remember that a lower purchase price can substantially impact the total interest you'll pay, which also means it can greatly impact your monthly payments. Staying flexible and considering multiple models will give you the best chance of finding a great car that still fits your budget.
Step 3: Work With a Specialty Lender
Many lenders specialize in providing auto loans to buyers with poor credit. These lenders understand that no two financial situations are alike and are more likely to consider the big financial picture. In other words, specialized lenders may look at other aspects of your overall financial health, allowing them to extend better loan terms even with a credit score that may have a few dents and dings.
Contact a dealer like Max Auto Sales to learn more about used car financing solutions for bad credit scores.
When I started shopping around for a car, I knew that I wanted something a little different. Unfortunately, I had no idea what to look for, which made things complicated. I visited several different dealerships, but it wasn't until I worked with the right salesperson that I found what I wanted. My salesperson showed me exciting new car models and talked with me about safety features, which really helped me to narrow down my choices. Check out this blog to learn more about finding the perfect car so that you don't have to worry about having buyer's remorse down the road.