Simple Steps to Get Approved for Bad Credit Car Loan

If you want to apply for a bad credit car loan, taking advanced preparations is important to ensure your approval. What can you do to avoid getting rejected on your car loan? Below are practical steps that should not be overlooked.

Order a copy of your credit report.

Okay, so you know that you have bad credit history. But how much do you really know about it? When was the last time you’ve taken a look at your personal credit report? If it has been 6 months ago or longer, it’s about time for you to order an updated copy of your report.

Carefully check for possible errors or false transactions made on any of your accounts.

It is not uncommon for bureaus to receive false reports from creditors so you’ll never know if these errors are pulling down your score. If you found any error, send a dispute letter to the bureau that issued your report immediately. Request for the matter to be investigated and corrected. By eliminating false records in your report, you can quickly raise your FICO score by several points.

Also, remember that the three major credit reporting agencies (Experian, Equifax, TransUnion) work separately. Thus, the report you get from Equifax may not be exactly the same as the report issued by Equifax or TransUnion. This is why consumers are advised to obtain a copy from each of the three bureaus.

Prepare for your bad credit car loan down payment.

You may be required to submit a higher amount of down payment due to your poor credit history. Hence, you need to be prepared and save up for this particular cost before submitting your loan application. Typically, lenders require at least 20% and above of the total loan amount.

Speak with your lender.

Many lending companies that offer bad credit auto loans allow online application. Although this can be quick and convenient, you’ll have better chances of getting approved if you would arrange a personal meeting with your lender. Aside from getting an approval, speaking with your prospective lender gives you the opportunity to negotiate for better loan terms.

Some lenders may be willing to look beyond your low credit score if they can understand the circumstances behind it. Perhaps you weren’t able to keep up with your payments in the past months because of sickness or an unexpected lost of job. Because of this, your good credit rating has been badly affected. Nevertheless, if your lender can see that you’re someone who is working hard to regain your good credit standing, you may be given a special consideration. In any case, whether your lender agrees or not, negotiating for a better deal is always worth the try.

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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

2 Comments
  1. Auto loans these days are a bit expensive, this is also a side-effect of the economic recession~-“

  2. Reply img-8
    Beverage Dispenser  October 17, 2010 at 11:33 pm

    sometimes it is hard to find a good company that offers auto loans;’~

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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