You may have felt that trying to get approved for a car loan has been a frustrating experience. Applying to one auto financing lender and getting rejected due to a poor credit score is one thing, but getting rejected again and again is just no fun. And, it gets you not one bit closer to getting that car you need.
Sometimes, you may feel just like giving up altogether and trying something else. Maybe you should go live on the top of a mountain in the Himalayas where cars aren’t needed. Or, you could become one of those marathon runners who runs 100 miles in a day. Or, how about just to taking the bus or your bicycle everywhere you need to go? But, when these crazy and impractical fantasies leave your head, you are left with the hard reality that you basically have no choice but to find a way to qualify for auto financing. Back to square one.
Fortunately, for people with a credit score rated as “poor” (under 600) by most lenders, there is the little-discussed world of bad credit auto financing. In fact, these financing companies are in the business of extending car loans to people in just your situation.
If you are looking for auto loan financing for a credit score of 600 or lower, here are 5 tips for getting approved more quickly:
1. You need to become familiar with the world of bad credit financing:
About 90% of car financing companies are happy to make loans to people with fair, good, or excellent credit scores. However, about 5% of them will ALSO loan to bad credit individuals – and the remaining 5% specialize in ONLY loaning to people in this credit bracket. The important thing is to learn how to find this last group.
2. Understand what bad credit auto financing lenders look for – beyond your credit score:
These specialty lenders have made it their business to learn ways to evaluate the credit-worthiness of individuals with low FICO scores in ways other than using the score itself. For example, some of those ways are to:
* look at certain details within the credit report
* consider your current income, employment and/or residential status
* look at past employment and residential information
* ask for references
3. Scrub your credit report squeaky clean (as much as possible):
Before you start applying to these lenders, you will want to review your current credit report(s) and look for any errors or misunderstandings which, if removed, could result in your having a much better score in a month or less.
4. Build yourself a list of candidate bad credit auto financing lenders:
Now, it is time to improve your own odds of getting approved for the best-possible auto loan financing rate. To do this, conduct some online research and make a list of at least 4-5 bad credit auto financing lenders. They advertise their specialty, so they will be easy to find. Of course, as with any industry, not all of them are reputable, so really check out their websites before adding them to your list.
5. Become a savvy negotiator if you want to get the lowest-possible interest rate:
As you apply to each lender, make sure to reject the initial offer you get. This will be hard to do and you will resist it, but make no mistake: doing so will increase your odds of them coming back with an even better offer.