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Things You Can Do Get a Car Loan with Bad Credit or no Credit

13 February 2018 No Comment

If you want to buy a car but you have poor credit, bad credit, or no credit at all, you may think it is impossible. However, there are several strategies that you can employ that can increase your chances of buying a car today, if not in the future.

Improve your credit rating

Everybody knows that if you have good credit and a good paying job, you will have no problem getting a car loan, so naturally you may be told that you need to improve both. However, many people may not be able to improve their income. Your credit, of course, can be improved. This is a long-term strategy, but it has to be mentioned, especially since many people aren’t sure how to do it. Most people know to make their payments on time, but a credit rating is also computed by your credit to debt ratio. How much credit you have available to use compared to how much debt you have. One of the best ways to improve your credit rating is to pay down your debt. However, you shouldn’t close your accounts. You need to have open accounts. Also, you should know that the bad marks on your credit report for late payments are dropped from your report over time, usually three years.

Have a large down payment

If you want a car right now, this may be the way to do it. If your credit is bad, but you have a large down payment, greater than twenty percent, a lender is more likely to approve a loan. A large down payment means that the car will have some equity built into the car. In other words, your car will be worth more than the loan, so if you were to default on the loan, the lender could repossess the car, sell it, and get their money back.

Look for first time buyer programs

Some dealerships will go out of their way to help a first-time car buyer with financing. This is a strategy that often works for those with little or no credit rather than those with poor credit. Car Loans For College Students is one example of people who often fall into this category. Most of these programs are offered by new car dealerships. Keep in mind the new dealerships also sell used cars, and they may be willing to apply it their first time buyer program.

Look for slow moving models

This strategy also works well at new car dealerships. Every car manufacturer has one model that is their slowest moving model. Of all of the car makers slowest selling models, there is the one model that is the slowest selling car on the market. If you can identify this car, often you only need to inquire about the car, and a salesperson will help you get the car. The reason for this is dealer financing. Most large dealerships have their own financing, so you don’t need to shop around for a loan. Of course, the downside to this is that the interest rate is likely to be higher, but if this means you can get a car with poor credit or no credit, then it might be worth it.

Keep in mind that even though you have poor credit or no credit, you should never go to a car lot with an attitude of desperation. A salesman may not work with you on getting a car, they may sense your desperation and conclude that they can’t make a sale. What you need to do is go to a dealership with an attitude that you are not there to buy a car, you are simply shopping. Let the salesman sell you the car. This is what they do. If there is a chance that they can sell you a car on the lot, new or used, and you have poor or not credit, it will be difficult to leave the dealership without being sold a car.

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