Bad Credit Auto Loans

If you have less-than-perfect credit, you can still qualify for auto loans. Here are some tips for borrowers with credit challenges.

• Order your free credit report. Take advantage of the free credit report you're entitled to from all three of the credit bureaus each year. Almost 80% of credit reports contain errors, so your credit might not be as poor as you thought it was. Check the report for accuracy, and you could improve your chances of qualifying for better auto loans.
• Get your credit score. For $14.95, you can order your credit score from one of the credit bureaus online. TransUnion, Equifax, and Experian all offer this service. Usually, the score will also come with a guide that explains the score ranges for bad, average, and good credit. If you have poor credit, it's better that you know prior to applying for an auto loan. Generally, a score below 620 places you in the "poor credit" category.
• Don't depend on the dealer. Dealer auto loans are an especially bad choice if you have below-average credit. The dealer already charges outrageous rates even to people with good credit, so they are especially prone to inflate the rates of loans for subprime borrowers. You are much better off going through a third-party lender, which means a lender that is not affiliated with the dealership. You can find an abundance of these lenders online.
• Do your shopping. Shopping around for auto loans pays off regardless of your credit score, but it can be especially rewarding for those with credit challenges. Make sure you get at least three or four different quotes from lenders before you commit to a loan. Different lenders can charge drastically different interest rates when it comes to subprime borrowers, so use the Internet to compare offers easily.
• Remember that your credit score isn't set in stone. If you really are not satisfied with the auto loans available to you currently, you can always wait and take some time to work on your credit. Your credit score is always changing and can be fairly easily improved with time and diligence. To get a better rate on your auto loan down the road, take a few months and be sure to pay your bills in full and on time consistently. You can also pay down your debt to give your score a boost.

Having trouble understanding any of the vocabulary used? Thats ok, alot of people do not know what these words mean. That is why a glossary of terms has been provided.