Does this situation sound familiar? You are someone who is trustworthy. You have never missed an auto loan payment. You have spent most of your adult life employed. And you are generally a very good person, if you do say so yourself. However, there is one chink in the armor: you have a bad credit score.
Given this type of background, despite all of your very positive traits, shopping for an auto loan can be a real challenge. You see, that bad credit score part really does make a big difference to the vast majority of creditors out there. When they see a FICO score below 600, they will consider it to be a sign of someone who is not responsible with their money.
And sure, the credit scoring system does have some merit: you don t get a bad score for nothing. But, when it comes to buying a car, your car itself acts as a form of collateral for the loan. And, the title is actually held by the would be lender until you pay it off. So, what s the big risk for them, right?
Fortunately, there are a handful of creditors out there who would fully agree with you. They actually base their business on helping credit challenged people to get their auto loans funded. Wouldn t it be nice to be able to find these creditors so that you could get funded?
If you are looking for creditors that help with bad credit auto loans, here are 5 steps to getting funded with a new loan:
1. Get to know what bad credit auto lenders look for in a borrower:
While bad credit auto lenders do not look past your credit score completely, they are different from traditional lenders in that they take it your score account only as one of many potentially important factors in your overall picture of credit worthiness. They also look at other aspects of your financial and personal history, such as your employment history, your history with other car loans, and the reasons why your credit score is not stellar.
2. Fix any errors that show up on your credit report:
Next, run your credit reports (from all 3 agencies) and figure out which items that show up there are actually misreported items or errors. Then, protest in writing each error you find. The errors will be removed in a timely manner, provided you did a thorough job of showing that they were errors.
3. Find a local bad credit lender and buddy up to them:
If you know of any, introduce yourself to a local bad credit lender in your area. Show them your credit report and ask them which items, if any, would be red flags to another lender. Then, find a way to truthfully explain each one, but painting yourself in the best possible light. This is great rehearsal for when you start applying for auto loans (see below).
4. Prepare your documents:
Prepare any documentation you can get your hands on concerning your own employment history, residential history, personal references and other personal details. You may need to use these items in a pinch.
5. Apply to as many lenders as you can:
Now, it is time to apply. Find an online resource that gives you access to multiple bad credit lenders. Then, apply to as many as you can. Hint: apply to all of them within a short time period, such a few days. This will help you avoid any negative effects that the multiple credit reports that are run will have on your score.
To find creditors that help with bad credit for auto loans, follow these 5 steps to getting funded.
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