Tips for Buyers with Bad Credit
Tips for Buyers with Bad Credit
If your credit score isn’t what you’d hope, purchasing or leasing a vehicle from a dealership (or any lender) can be a stressful process, especially for first-time buyers. But did you know that there are a few concrete steps you can take to improve your credit score ahead of your next car purchase? We’ve outlined a few key methods below, so keep reading to learn how to rebuild your credit.
Check Your Credit Score Beforehand
It might be rough to see just how bad things are, but it’s better to know where you’re starting from so you can make achievable financial goals. Your credit history affects your credit score, which is what lenders and dealers use to determine your “creditworthiness.” They’ll be checking your credit, so you should as well. For the most part, scores above 700 are considered “good,” and will qualify you for lower interest rates on your auto loan. Factors like how long your financial accounts have been open, the number of open accounts, and the consistency and percentage of minimum payments made will affect your score.
Improve Score + Fix Credit Errors
If your credit score is lower than 700, you might want to consider raising that number before applying for a loan. While our finance department is experienced in working with a wide range of credit scores, you’ll be better off in the long run if you take steps to improve your score today. Interest rates increase significantly for those with lower credit scores. To avoid this, check for errors in your credit report, because there’s always the possibility for mistakes. Once potential errors are corrected, your score should improve as well.
Make a Budget + Get Pre-Approved
How much are you willing to spend on a new or used vehicle? Your decision should factor in your needs, like how many passengers you’ll typically have, how much of a down payment you can afford and how long you want to make payments. Once you’ve put together a budget that includes car insurance and maintenance costs, go ahead and get pre-qualified with our simple online finance application.
Here’s the Plan: Big Down Payment + Shorter Term
Just got pre-approved? Congratulations! You’re almost ready to drive home the car of your dreams. After your test drive, just speak with one of our financial experts about the financing options available to you. We recommend placing as much down as possible up front, and agreeing to loan terms that are no longer than 60 months. However, depending on your credit situation, those terms could vary. You should always plan on paying off your loan early, though, so that you can improve your credit score.
But What If I Got Denied?
No worries! While it can be frustrating, there are other 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 the debt accrued in your name to improve your credit score. Don’t be discouraged if it takes several months or even a year to accomplish this – progress takes time. Our financial team is just a phone call away, and is happy to discuss your finance options in greater detail.
At Joe Cooper Ford of Shawnee, 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 4921 N Automall Dr, Shawnee, OK 74804. We proudly serve customers from Harrah, Tecumseh and Seminole.