Unfortunately, a great lot of us are suffering from poor credit scores. It keeps us from being able to do a lot of things, such as buy a car or get an apartment.
It is estimated that a whopping 30% of Americans struggle with their bad credit scores everyday. However, if it is that common, do many people have to deal with the fact that they can’t get the things that they need?
Luckily, there are many ways you can get around your low credit scores to get what you need. There are lots of financing options and loans with bad credit for people with low credit scores.
Keep on reading this article to find out why you have a bad credit score and ways you can get car loans with bad credit.
Why Do I Have a Low Credit Score?
The only way to know for sure why your credit score is so low is by checking your credit reports. These reports will help pinpoint exactly where you got a bad credit score from and this will help you know what to avoid to keep it from lowering further.
One of the most common reasons you may have a poor credit score is missing or paying a lot of your monthly payments for your credit cards.
This can greatly affect your fico score, especially if you do those things often.
Another way you could have lowered your credit score is by actually never getting a loan before. This happens because you do not have any evidence that you are capable of paying off a loan in the first place, which can be a bit difficult for people to figure out how they can raise it.
Additionally, if you have faced some financial legal issues in your past such as going bankrupt, it can greatly lower your credit score.
Are There Ways I Can Raise My Credit Score?
There are lots of ways that people with poor credit can raise their credit score. For one thing, if you are able to get a loan like a car loan, it can help you raise your credit score.
However, keep in mind that you must make sure that you pay your monthly payments on time and in full in order to raise your credit score.
At the same time, getting a loan in the first place might be difficult for people with low credit scores.
If you have any debt or things that must be paid from your credit cards, try to clear as much balance as you can and make sure that you pay the dues on time.
Just like with the loan, you must make sure that you pay your bills on time and in full in order to try raising your credit score.
However, doing these things may take up to 2 to 4 years until you get a good credit score. Thankfully, there are still ways you can get an auto financing loan quickly even with bad credit.
Should I Go to a Traditional Lender for a Car Loan?
Even if you have a bad credit rating, you can still try your luck at getting an auto financing car loan from a traditional lender.
However, this may prove to be difficult to achieve at first, because you may get denied by many lenders or banks because of your credit scores.
Of course, there are still lenders that offer bad credit auto loan that could potentially give you a loan, but there is no guaranteed answer as to whether you will be approved or not.
And if you do get approved for a car loan, then you might be facing some high interest rates.
The reason that you would get charged higher interest rates compared to people with average or good credit scores is because it is almost a consequence of your bad credit score or for a way to make sure that the lender gets more money for dealing with a risky client.
This might be good if you want a brand new car, but you might end up pulling out much more money than you would want to throughout the loan term.
What’s an Easy Way for a Person with Bad Credit to Get an Auto Loan?
One of the quickest and easiest ways a person can get a car loan is to visit a buy here pay here car dealership.
These dealerships are quite friendly and are more than ready to approve anyone for an auto loan, even if they have poor credit.
Most of the loans that they offer will make you get a preowned quality vehicle from their dealership.
People at buy here pay here car dealerships will simply extend their own credit towards you for you to be able to get an auto loan.
Once you get the auto financing that you need, you will be in charge of paying them back for the loan that they gave you.
More often than not, you will not have to deal with high interest rates because these car dealerships have a lot of competition.
Therefore, they will price their interest rates competitively, so you can choose a good dealership for a quality used car at a great price.
If you are wondering why these people are more than happy to give you a car loan, it is because they want to earn as well.
Their pre owned vehicles are in great condition, but they don’t sell as well as their brand new ones would.
Keep in mind that they are not just going to give you a car loan without asking you a few important questions first.
One of the most important things that they will want to know is to see how much you make every month from your job.
Since they don’t base their car loan approval off of your credit rating, they will base it off how much your monthly income is.
This will help them know if you will be able to pay off your loan easily. They don’t see your credit score as a level of how financially responsible you are, they would rather see if you are financially capable.
You could also always opt to get a car lease if you aren’t approved for a loan or aren’t sure about getting a loan from a traditional lender or go to a buy here pay here car dealership.
Car leases are usually easy to apply for like a buy here pay here car dealership and offer low monthly payments for the car that you would get.
This is because you are considered to only be leasing a part of the car, hence why it is so low.
Keep in mind that you won’t keep a car that you lease, once the leasing period is over you have to return it.
Additionally, you may be charged with high interest rates that could pile up throughout the leasing payments.
You might end up paying for more than what the car is worth and not even get to keep the car in the end.
All in all, the easiest way to get a car loan is to go to a buy here pay here car dealership. Not only is it a quick process and approval, but it is one of the most affordable ways to buy a car right away.