If you have a checking or savings account with a bank or credit union, they may be the best bet for you to get an auto loan.6. Wait until your credit is better or plan to refinance. Your credit score is how lenders determine if you'll be a good credit risk or not.
The five factors that determine your credit score are payment history, outstanding balances, length of credit history, new credit and types of credit you have. Your FICO score, a numerical gauge of your creditworthiness, ranges from Three hundred to 850---the higher the number, the better.
Instructions
1. Find a subprime lender (lenders who specialize in subprime loans). They're eager to loan you money because they can charge you high interest rates. Only use a subprime lender as a last resort. Be particularly leery if the lender doesn't disclose the terms of the loan, such as payments, penalties and fees. Late-payment fees and other penalties should be spelled out in your contract.
2. Find out what your FICO score is. You can contact the three credit reporting agencies (Experian, TransUnion and Equifax) to determine your score. If your score is Seven hundred twenty or more, you're in the gold category and can probably get any auto loan you want. If you go to a subprime lender first and your FICO is above 720, they probably won't tell you that, hoping you'll take the subprime loan. If your score is under 620, you'll probably only qualify for a subprime loan.
3. Determine if there are any errors on your credit report. Maybe your score is lower than it should be because of an error. If that's the case, let the credit reporting agencies know about the error immediately. Write to all three credit reporting agencies and describe the problem.
4. Get your loan before entering the car dealership. You should try to obtain your auto loan from somewhere other than the dealer, especially if your credit is less than stellar. According to Edmunds.com, the car dealers take a cut from their financing deals. Loans from the dealer, therefore, may cost you more.
5. Shop for the best deal.Don't depression provided you compass deficient credit and can't qualify for a van loan. There's even desire: Particulary, subprime lending. Whether you're wondering why you're in the subprime Sort, it's owing to of your credit score.
With two or three years of working toward good credit, mainly by using your credit card for small monthly purchases that you can pay off in full and on time each month, you can raise your credit score. You can wait the two years or so until your credit score improves, or you can get the subprime loan and refinance the terms when your credit improves.
