Take Advantage of Your Bad Credit Car Loan

December 29th, 2017 by

The fact that you are googling “bad credit car loans in Louisville” is not exactly a great sign. But then again, you didn’t need us to tell you that. If you’re trying to secure a car loan and you have bad credit, chances are you have been turned down by lenders recently – or at least, you anticipate being turned down by lenders in the near future. Why not break the cycle of bad credit once and for all? Why not make this car purchase the impetus to regain control of your finances and put your terrible credit credit history on an upward trajectory? Wouldn’t it be so wonderful if the next time you need to secure a car loan you didn’t have to put “bad credit” in the search engine? Read on to find out how taking out this bad credit car loan could help put you (and your credit history) on an upward trajectory to excellence.

 

Don’t Just Assume Your Credit History is Bad

First of all, are you absolutely sure you have bad credit? You may laugh, but you’d be surprised at how many people think that their credit is in the tank when really it’s perfectly average… maybe it needs a little TLC, but it’s certainly nothing that can’t quickly be fixed. If you’re at the stage where you are simply assuming that you are working with bad credit, stop everything you are doing and head right to the three major credit bureaus and check your credit history and score right now. We’ll even give you the links to visit TransUnion, Equifax and Experian. Request your free annual credit report and then sit down carefully go over every page to ensure it’s accurate. Sure, they may be big firms, but even big firms make big mistakes, so don’t hesitate to let them know if you spot an inaccuracy. It’s easy to fix a mistake on your credit, but if you don’t, it could follow you around and damage your credit history for years to come.

Keep Track of Your Credit Score

Once you’ve checked out your credit history with TransUnion, Equifax and Experian, you’ll want to join a free credit score monitoring tool. Credit Karma is a great place to start although you may also find free credit trackers tied right into your credit card’s own website. Do a little digging around because no matter which credit tracker you choose to use, make a date to visit it at least once a month to track your progress and check for any errors. This is will become important once you secure your car loan.

Budget, Budget, Budget

In fact, let’s just jump right to that: the car loan. First of all, before you even step foot into a dealership, you need to figure out exactly how much money you can afford to put down that day and then how much money you can afford on the car loan each month. You’ll also want to factor in payments such as car insurance and registration. Figuring out your finances will require some diligence and possibly a little stressful financial reconciling, but once you have your budget in place and you know what you can comfortably spend, you’ll have no excuse to buy more car than you can actually afford.

 

Be Reasonable When You Shop

Sure, everyone would love to drive a new BMW or Mercedes, but that’s simply not realistic for many of us… and if you’re drowning in bad credit, it’s certainly not a wise decision to even consider getting a car that expensive (and honestly, it probably wouldn’t even be possible). However, that’s not to say you have to buy a piece of junk either. Think about what you need out of your car. You probably don’t need a sunroof, but if you live in say, Texas, it’s reasonable to assume you need air conditioning. You don’t need a car with less than ten miles on it, but if you’re going to be putting oodles of miles on your used car, then it’s not a bad idea to start with a lower-mileage option. Take a moment to think about the things that truly matter to you when it comes to your new-to-you car and tell yourself you can splurge on the top-trim and sunroof package the next time you buy a car. You know, when you’re credit score has shot up to above 750.

 

Be Upfront with the Sales Team

Don’t be cagey or shy about coming right out and telling the sales person what you are comfortable spending: a good sales team will never push you into buying something you simply cannot afford. If you begin to feel as though you’re getting pressured into making a decision you are even slightly unsure about, simply leave the dealership. There are plenty of places to shop for cars that will respect your need to stay within a certain dollar amount and those are the places in which you want to do business.

Agree to a Loan that You Can Actually Afford

Once you find a car that you like and that aligns with how much you can afford to spend each month, work with the finance team to find a loan that works for you. You may have better luck getting a loan from your bank or local credit union, so don’t be afraid to shop around for the best interest rates and terms. Of course, once you sign that ownership paperwork, the responsibility sits squarely on your shoulders to meet your loan obligation each and every month, on time and without fail. If you are able to commit to making your payment every month, you’ll be amazed at how quickly your credit will begin to improve.

 

Use Your Car to Maximize Every Advantage

So now that you have your car and you’re making your payments each and every month, not only will you begin to see changes in your credit score and marked improvement in your credit history, but you may even see new opportunities on the horizon. If you were stuck in a low-paying, dead-end job before you bought your new car, well, now is the time to break out of that position and find a new place of employment. Thank to your new-to-you wheels, you can commute to further, better locations where more opportunity may exist – which means you may soon be bringing home a heftier paycheck. Of course, since you are now such a budget guru, you’ll know to apply that extra money to paying down additional bills and credit card loans so that you are adding tools aside from just your car payment to your credit-repair arsenal.

Use the tools listed above, follow our sage advice and it won’t be long before you’ll be sauntering in to buy a new car with absolutely no credit history worries trailing behind you.