Tips for Buyers with Bad Credit
Tips for Buyers with Bad Credit
If you’re burdened by a less-than-ideal credit score, purchasing or leasing your next vehicle can be a hassle. Thankfully, there are a few helpful ways that prospective car buyers can improve their credit scores to secure a better rate on their loans or leases. We’ve outlined some of the best ones below, so keep reading to get one step closer to driving home in the car of your dreams!
Check Your Credit Score Beforehand
It’s better to know than not know, no matter how painful it might be. Checking your credit score enables you to better plan for future financial decisions and commitments. Credit history factors significantly into your lender’s decision on whether to provide you a loan or, if they do, what interest rate to charge. Scores above 700 are generally considered “good” by lenders, and can qualify you for lower interest rates. Factors that affect your credit score include how long you’ve had your financial accounts, the number of accounts, and the consistency and percentage of minimum payments you’ve made.
Improve Score + Fix Credit Errors
For scores under 700, getting approved for a loan or obtaining a modest interest rate can be tricky. But there are ways to improve! One of the first things to do is to check for errors in your credit report, since they can have a negative impact on your score. Luckily, our finance center works with customers from a wide range of financial backgrounds, including those with poor credit.
Make a Budget + Get Pre-Approved
Decide ahead of time how much you’re willing to pay for a new or used vehicle. Your decision should be based on your needs, like how many passengers you’ll have on a daily basis, gas mileage, your bank account (how big of a down payment you can manage) and how long you plan on making payments. Once you’ve put together a budget that factors in car insurance and routine maintenance and repairs, you can apply to get pre-qualified with our simple online finance application.
Here’s the Plan: Big Down Payment + Shorter Term
Already been pre-approved? Congrats! You’re almost ready to drive home that car you’ve been dreaming about. After your test drive, simply talk to one of our financial experts about the options available for financing. We recommend making as large of a down payment as you can manage and keeping your loan term under 60 months. Again, though, depending on your credit history, those numbers could change. You should always plan to pay off your loan early, though, because doing so will improve your credit score.
But What If I Got Denied?
Don’t stress out just yet! While inconvenient, you still have options available if you’ve been denied a car loan. Consider asking a trusted friend or family member to co-sign a loan, or tackle your existing debt to improve your credit score. Remember – it takes time and work to rebuild your credit and improve your financial situation, so don’t get discouraged if it takes months, or even a year or two, to see results. Plus, our financial experts are just a phone call away if you’d like some guidance or to discuss your options.
At Joe Cooper Ford of Edmond, we work with customers from a variety of financial situations. If you're worried about what kind of vehicle you can afford, come visit us at our dealership located at 600 W. Memorial Rd. Oklahoma City, OK 73114. We proudly serve customers from Oklahoma City, Moore and Midwest City.