Those that have bad credit scores can also apply for a bad credit auto loan. Most of the credit unions and banks use your FICO score. A borrower’s FICO scores are an indication of how responsible they have been with all their finances, including loans, credit cards and bank accounts. Your credit history would reveal whether or not your history includes foreclosures, bankruptcies, or repossessions. The FICO credit scores can range between 300 and 900. Customers with a credit score greater than 720 are regarded as desirable; conversely, people with a credit score of less than 600 are considered high-risk.
Checking Your Credit Rating
If you are planning to apply for an auto loan and you have bad credit, then check your credit scores first. If you find any loopholes, then make a report. Get a free report from the myfico.com website annually. Your changes to credit score would be reflected in the report. This is a valuable tool for bad credit auto loans and other loans too.
Preconditions for Getting a Bad Credit Auto Loan
You should either U.S. or Canadian resident, and should have this documented. You can also use electric or credit card bills with evidence of your address. Typically at least $1500 will have to be your gross monthly income for lenders to extend loans for bad credit auto loans. If you have no credit rating, then you should be employed with the same employer for at least a year. If you have a low credit rating, then you should be employed for at least two years. When applying for bad credit auto loans, in many cases the lenders may ask for a higher down payment.
If your vehicle has been repossessed in the last 12 months, you should wait until these 12 months have ended. You would apply for a bad credit auto loan even if the vehicle repossession was due to bankruptcy. Don’t even pursue the lending company before you do some homework.
Completing a Bad Credit Auto Loans Form
Confirm the interest rates while filling out the inquiry form for bad credit auto loans as they vary from state to state. For bad credit auto loans, you can approach your bank where you have a checking account or even credit unions. It would be beneficial to your cause to meet the loan officer face to face. For bankruptcy or vehicle repossession, explain to them the reasons so that they can understand your position and sign the loan. To help improve your credit score often they are able to work with you.
You could also try to get a bad credit auto loan online. All you need to do is fill out a form regarding your personal information, residential information, employment information and bank information. The website can link you to a ton of lenders along with their phone numbers. You credit score is the deciding factor in these lenders determining what sort of interest rate they are going to offer you.
Bargaining with bad credit auto loan lenders is possible. Obtain the optimal bargain for the car you want to buy.