How to Finance a Car Despite Bad Credit

If you have bad credit, financing a car is a challenge. Lenders can charge high interest rates and car dealers can stick you with huge monthly payments. Then those high payments and interest rates just end up making your credit even worse. If you need to get a ride, there are ways to finance a car despite your bad credit.

Instructions

Difficulty: Moderately Challenging

1. Pull your own credit report before you shop for a car. Go to the Equifax, Experian or TrueCredit websites for instant reports. Don't get a report from each as your credit score lowers every time you have your credit checked.
2. Review your credit report. Any delinquent loans should be paid current before you shop for a car.
3. Look at your "Beacon" or "FICO" score at the top of the report. Banks use these scores to rate their potential customers. Basically 600 to 700 is okay but under 600 is bad. If your score is 550 or less, you will have to repair your credit before proceeding.
4. Save some money for a down payment. The more money down, the better off you will be when buying a car.
5. Read up on current interest rates and loans at websites such as CarBuyingTips.com before heading to the car lot. This helps you know what type of rate to expect.
6. Take your credit report and visit a few new car dealers. Most dealers have sub-prime credit departments to help people with bad credit buy cars. Show them your report instead of having them pull your credit.
7. Choose a car based on affordablity, not on style. You can't be picky when it comes to financing a car with bad credit. The dealer stocks cars that are in your price range and fit the parameters of their loan programs.
8. Listen to the salesperson or manager when he or she discusses the details of your auto loan. Expect to pay a higher interest rate due to your credit problems but, since you did your homework, you'll be aware if you're being offered a ridiculously high interest rate.
9. Keep your car as long as you can once you've been financed. Pay the loan payments on time for the life of the loan and then you can be picky about your next car!