Buying a car, whether it is for your high schooler to get around or for you upgrading to a new model, will require a hefty amount of money. The best way to bank roll this expenditure is by taking out a loan with a decent interest rate. This is a very common practice, but it may become difficult if you have a bad credit score. This simple three digit numerical expression of the state of your credit is the ultimate thumbs up or thumbs down when it comes to financial decisions. If you have bad credit and are looking to get a car, do not hit the panic button just yet. Even if you are in this boat, you can still take a few steps in order to get decent rates and a loan that will help you get a car.
Look at your credit
The first step in this process is to look at the current state of your credit. Get a free credit report and see what your current score is. By looking at this document, you will be able to see if you can get the financial help you need and look for ways to fix credit. If you have a low score, you can check into options to help you repair your credit score.
Choose a model wisely
Before you pick out your dream automobile, look around first. If your credit score will prevent you from getting the loan you need or interest rates you want, you may have to downgrade the car you are looking for. You don't have to head to a junkyard, but you may have to choose a two door instead of a four door.
Many lenders will allow you a little assistance when getting a loan. That might mean having a cosigner. Generally this option involves you asking a good friend or relative, who has good credit, to sign on to the loan with you. This will help you get the loan and interest rates you desire. During this time you want to improve your credit score. This will assist you in your quest to get a car and financial decisions down the line.
If you get a loan for your car but are not happy with the rates you have, you may want to look into refinancing. This option will let your take your current loan and transfer to it to one with better rates. The new rates may only be a 1 percent difference, but that 1 percent will knock off a good chunk of your loan.