Bad Credit Car Loans
When buying a new or used car, you could pay for it in cash. However, it’s more likely that you’ll take out an auto loan and make payments each month until the vehicle is completely paid off.
When it comes to car loans, you may wonder what type of credit you need to get one. The fact of the matter is, you can get a loan whether you have good credit, bad credit, or no credit.
Below, we’ll specifically talk about bad credit car loans. Our team at Boardwalk Honda will cover how you can get a loan with bad credit. Then, you can always contact us to start shopping for a new ride near Atlantic City or Egg Harbor.
Getting a Vehicle with Bad Credit
It’s certainly possible to get a car loan with bad credit, especially if you follow these tips…
Understand Your Credit Score
A credit score is a 3-digit number that’s generated from reports by several credit bureaus: Equifax®, Experian®, and TransUnion®. You should know this number before you apply for a loan, as it can tell you what type of loan you’d get with what interest rate.
The number can be anywhere from 300 to 850 and is calculated from the following factors:
- Type of credits you have, such as student loans or credit cards
- Payment history
- Length of history (i.e., average age of your accounts)
While credit scores vary, they’re based on the data that’s in your report. By reading through this information, you can see what exactly is affecting your score and where you can improve.
Save for a Down Payment
When purchasing a new or used car, it’s recommended to put down 20% or 10% of the total cost initially.
If you can save a good bit of money, then you can make a more significant down payment. By doing that, you can reduce the amount of a car loan that you’d need.
Get Pre-Approved for a Loan
It’s also recommended to get pre-approved for a loan at a dealership. Many dealers have finance applications online that you can fill out right from home.
By filling out this short and secure form, you can get all your pertinent information sent to the dealer’s finance center right away. Then, they can reach out to you to discuss your options and have you driving home in a new ride in no time.
Ways to Improve Your Credit
The above tips, when implemented, can help you get a car loan. However, you may be interested in improving your credit after reading your report.
One way to boost your credit score is by making sure you pay all your bills on time, such as your phone payment or student loans. You’ll also want to make sure to keep the balances on your credit card or cards as low as possible.
Another way you could improve your credit is by only applying for and opening new credit accounts when needed. The simple act of applying for credit can have a negative impact on your overall score. In fact, this hard inquiry can stay on your report for two years.
By being mindful of the type of credit you have and paying everything off on time, you can have a significant increase on your credit score, overall. This can then determine what type of car loan you’d get and at what interest rate.
Shop for a New or Used Car Today
If you’re looking to get a car loan with your current credit, the experts at Boardwalk Honda can help. Contact our finance center, and we’ll have you driving around Atlantic City and Egg Harbor in a great new vehicle in no time!