What To Do BEFORE You Ship For A Bad Credit Auto Loan
What To Do Before You Visit A Dealership When In Need Of A Bad Credit Auto Loan!
If your looking for a good used car, just finding a reliable car can be a challenge in itself. Now if you are looking to finance a car with bad or no credit, on top of finding something reliable, now that sometimes can be a real challenge! Finding a good deal at a local car dealership is not so hard to do. It’s finding a dealership that will not try and pull a fast one on you and add in other aftermarket products and services that will wind up costing you a lot more money in the long run, that you should also be careful about!
If you have some sort of bad credit, it can be a nightmare when your car dealer or bank gives you an extremely high interest rate on your auto loan. It makes you feel like it is impossible to get a good deal with a low credit score. Sometimes this is true, but not in most cases.
At times this can be the case but one thing to remember is that car dealers need to sell cars. Don’t be afraid to walk away and try your chances at another dealer if you feel you are not getting a good deal. The message I will try and get across to most readers of this article is what to do to prepare yourself to get a good deal when shopping for a bad credit car loan.
The most important thing to get before you shop is “Credit Score”. You need this in order to get an idea of where you stand and how bad your credit really is. Most of the times people go about the whole buying process backwards. They go to a dealership, find a nice car that they like and then the dealer comes back with an auto loan approval only to tell you that you barely qualified for this car because of your credit history and credit score. They may just be trying to charge you a higher interest rate and in turn make a few thousand dollars extra on your deal, than if you already knew what your credit history looked like. a 2 to 4% increase in your interest rate can mean as much as $2000 more in interest payments coming out of your pocket over the life of the loan! This is obviously something you want to avoid.
Your first step should be to go on the internet and find a company that offers credit reports with FICO Scores. Get a credit report with scores from al the three major credit reporting agencies such as trans-Union, Equifax and Experian. All three credit scores will vary a little bit but you can use the highest score of the three to your advantage if you have to! Also remember that if you contact the credit bureaus directly, they offer you a free credit report once a year. This is something that everyone is eligible for., and is very important if you want to get a good deal on your next bad credit auto loan.
Lenders determine your credit risk by looking at your credit score. Credit FICO Scores can range from as high as 900 to as low as 450 or so. Obviously, the higher the score, the better interest rate and deal you can get! What usually happens is that if you do not know your score, the car dealer can lead you to believe that your credit is much worst than it really is, and tell you that this rate is all you qualify for because your score was to low. This can wind up costing hundreds of dollars more in the long run. Car dealers always have some room to negotiate. When doing financing, they usually make a few points on the interest off the entire loan. Keep in mind that dealerships are in business to make money an if they do not cover their overhead, they will not be open for business very long. So when negotiating keep in mind that the deal has to be good for both the consumer and the dealership! It’s only fair.
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