How to Get a Car If You Are Broke With Bad Credit

A used car may be the only option for someone who is broke with bad credit.

In a bad economy, many people are out of work and broke. These people may find it difficult to get a car with no money, and having bad credit can make it even harder. Fortunately, it's not impossible to get a car if you're broke and have bad credit, if you know where to look for money.

Instructions

1. Ask family members and close friends for a personal loan. If you are a trustworthy individual who simply fell on hard times, it's likely that someone close to you will want to help by making you a personal loan that you can pay back once you get back on your feet. If taking a loan from a relative or friend, make sure that the repayment terms are very clearly spelled out to avoid disagreements down the line.

2. Find out what your credit score is. You may think that your credit score is much worse than it actually is. You may find that even with a score in the low 600s, it's possible to get approved for a car loan. You can find out what your credit score is by calling the three credit bureaus---TransUnion, Equifax and Experian---or going to their websites. Alternately, you can sign up for a service that provides you with all three credit reports and score at once, such as CreditReport.com.

3. Try to secure a car loan. Using an online service like Lending Tree or E-Loan that submits your information to many lenders simultaneously and sends you information on lenders that are willing to approve you is most time efficient. Some lenders specialize in car loans for poor credit borrowers. However, be prepared to pay a high interest rate. You may also try going to your local bank or credit union to see if they would be willing to approve you for a car loan.

4. Ask someone close to you to cosign on a car loan if you are having problems getting approved. A parent or other close relative may be willing to do this for you. The cosigner should have good credit and income. Make sure to let the person cosigning for you know that you appreciate what they're doing and that you will be responsible in paying back the car loan, since they will get stuck with the debt if you default on it.

5. Visit your local junk yard if all else fails. Many people salvage cars from junk yards that, while, not in pretty shape, can be made usable again with some elbow grease. This is a good option only if you are mechanically inclined, because otherwise, you will likely have to shell out quite a bit of money to make a junk yard car usable.

References

• CreditLoan.com
• Edmunds
• Car Buying Tips