Tips To Get You Approved – Indianapolis, IN

July 19th, 2019 by

A 2019 Chevy Cruze and the Cruze hatchback are shown parked in front of an office building near a dealership who helps with bad credit car finance Indianapolis, IN.

If you’ve ever found yourself googling “Bad Credit Car Finance Indianapolis” then you’ve come to the right place. While Indianapolis has had it’s economic ups and downs, there has never been a better time than right now to apply for the right motor vehicle for you. If you know that your credit history is riddled with bad marks, there are several things that you can do to improve your chances of getting approved for a loan. Whether you decide to lower the principal amount, find a co-signer, or polish your current credit record, any steps taken to improve your credit will increase your chances of getting approved for auto financing. Let’s review a few of the best things that you can do to improve your financial situation.

Put More Down

The quickest way to get approved for a loan that you might otherwise be denied for is to put a healthy down payment on the car. While you might not be able to get financing for the entire $25,000 of that car you want, dealerships may change their tune when they learn that you can put 40% down. Even if you don’t have the cash, if you have a proper vehicle to trade in you can improve your chances of getting approved dramatically. The fact of the matter is that any way you can lower the total amount you need financed, the more likely you are to be approved. For this reason, it is always important to take care of your current car to make sure that you can get maximum trade-in value out of it when the time comes. Start saving early so that when it’s time to make a new car purchase, you have a nice nest egg saved up.

Take Care of Your Credit Cards

Credit utilization plays a large factor in credit approval decisions. If you have any maxed out credit lines, you could focus on paying some of those off before you apply for credit. Ideally, every one of your lines of credit should be below 30% utilization. This means that if you have a credit limit of $1,000 and have an outstanding balance of $800 on it, you should try to pay it down to $300 for a few weeks prior to applying for financing. Another factor that can improve your credit is making sure that your bills are always paid on time. If you don’t have it set up already, make sure that your bills are on auto-pay so that you never have to worry about a late payment again.

The more credit that you have, the easier time you will have in the financing department. If you can open up a department store credit card and use it appropriately for six months, you greatly increase your chances of being approved for auto financing. You want to keep your credit lines open for as long as possible. If you’ve paid off of a card recently there is no reason to call and cancel it. Keep it around and use it for other purchases and make regular payments on it to keep up your score. Another thing you can do with any current cards is to call and ask for a limit increase. If you have a history of low utilization and on-time payments, you can improve your credit with a simple phone call. Responsible use of a credit card is the first step to take in improving your financing opportunities.

Double Check Your Credit Report

While rare, it is possible that there is something on your credit report that is erroneous and needs to be removed. Check your credit report at least once a year (it’s free). If you see any items that you know you paid off still on there, you can file a dispute with the credit reporting agency. Sometimes people enter information into their computers wrong. Through an honest mistake, there could be a credit card out under your social security number that you don’t even know about. When you dispute an item on your credit report, the burden of proof is initially the responsibility of the agency you are disputing against.  It takes a long time for items to fall off of your credit report naturally, so it is always worth it to dispute items on your credit report that you don’t recognize.

If there is something on your credit report that has been sent to collections that you forgot about, you can try to negotiate a “Pay to Delete” deal with the reporting agency. Not every agency will do this, but those that do are willing to remove the derogatory remark upon fulfillment of the debt. If they refuse to negotiate, it is up to you to decide what to do. If they are willing to work with you, try to pay off all the outstanding debts that you can prior to applying for car financing. Worst case scenario, know that all items on your credit report fall off after seven years. If there is an item on your credit report that is from six and a half years ago, it will benefit you to wait the six months to apply for financing.

A man is looking up his credit for a bad credit car finance Indianapolis, IN.

Better Yet, Do Them All

We’ve discussed some various tips that you can use to help improve your confidence when talking to a dealerships financing team. Knowing what you’re getting yourself into ahead of time means that there are fewer surprises and you have a better understanding of what cars should be in your budget. Remember that getting approved is only half of the battle. Once you get approved you need to make sure that the interest rate that you are paying is reasonable. When you get your credit score into the high 700’s, you can expect a sub 5% interest rate on most loans. New cars will have lower interest rates than used cars because the collateral is worth more. While there are some dealerships that specialize in getting financing for “high-risk” customers, with a proper credit history you will only give yourself more options. When you utilize all of the tips outlined above, you should be well on your way to getting approved on a damn fine car that will provide you with a quality ride for years to come.

With a lower interest rate or just a smaller loan, you will have more money to spend where you want it. You can take your kids to meet the Dracorex Hogwartsia at the Children’s Museum of Indianapolis, you can go on a date to the Indianapolis Zoo and visit their botanical garden, or even get tickets to see the Indy 500.

Bad Credit Car Finance at Online.cars

At Online.cars we are an entirely online dealership meaning you will never have to come down to a physical lot to pick your next vehicle. We offer financing for people with poor to excellent credit, without requiring a social security number or hurting your credit score. We are here to help those who need it build up their credit and to get you into a vehicle that meets your needs and your budget so you can spend time on what matters.