Following these tips can help you approach the bad credit car loan process in the right way.
Auto Net Financial
From the beginning, we want you to know that at Auto Net Financial we work with retail car dealers that specialize in bad credit auto loans to get our applicants’ auto credit reestablished and raise their FICO scores. We feel this approach has definite advantages, which we’ll explain later on.
In the mean time, here is the procedure that we suggest you follow to make the process as smooth as possible.
Know the score
You really need to know your credit score before you begin looking for a new car, if for no other reason than it may not be as bad as you think. Beginning the shopping process without knowing your credit score is a bit like taking a trip without bringing along a map.
Without a road map, you may have a general idea of where you’re going, but you could easily take a wrong turn and end up on a dead end road. The same is true when buying a car. If you don’t know your credit score, you are at the mercy of whoever pulls your credit report. Unfortunately, there are still some car dealers that could take advantage of this to justify a higher interest rate on your next loan.
You are entitled to one free credit report per year from each of the major credit bureaus (Equifax, Experian, TransUnion). In order to receive a credit score, though, you’ll have to pay for it. As an alternative, web sites such as www.creditreport360.com will, for a fee, furnish you with all three credit reports, plus your three scores, at the same time.
Once you receive your reports, review them for any mistakes. First and foremost, have any mistakes that appear corrected through the dispute process. If possible, pay down any balances on your credit cards to no more than 20% of your credit limits. If you have open credit lines that you’re not using, don’t close out these accounts (the more credit you have available, the higher your credit score will be). Even though each lender has its own definition of what constitutes a subprime borrower, in most cases if your credit score falls below 640, you are in subprime car loan territory.
Avoid buy here pay here dealers
These dealers are also called “tote the note” and “in-house financing” dealers. If you’ve been turned down everywhere else, these dealers will finance practically anyone. The downside is that they’ll require a large down payment and, in most cases, they won’t report your payment history to the credit bureaus.
Apply online with Auto Net Financial
Even if you know you need a bad credit car loan, by blindly applying for a loan at the first dealer you visit, you run the risk of being turned down for the loan or paying a higher interest rate than necessary. You could also go online and apply for a bad credit car loan directly with the lender. Unfortunately, most bad credit car loans are made indirectly by lenders who only work with through new car dealers.
Your third, and best, choice is to apply for a bad credit car loan through Auto Net Financial. Our nationwide network of dealers caters to customers who are serious about reestablishing their car credit and improving their FICO scores. These dealers specialize in bad credit auto finance and they work with a wide spectrum of lenders to get you approved at the best possible interest rate.
For more information about subprime car loans, go to www.autonetfinancial.com. Our website has calculators to help you determine your budget as well as a loan resource center that can help with your questions. If you need additional assistance, our toll free number is listed at the bottom of every page.
