For people with bad credit, it is quite difficult to get a car loan. However, it is not entirely impossible. There exist finance companies specializing solely in providing loans to consumers with poor financial past, but the catch is that these companies demand a very high interest rate in return. And this is a problem, because such a consumer, with unstable financial condition, can only afford a car loan on a low interest rate. A low interest rate becomes even more important over the passage of time, as it eventually saves one plenty in terms of cash. Still, if one cleans up his/her bad credit as much as possible and picks the right places to apply for finances, it is very much possible for them to end up with a car loan on good enough terms. For that, we have a fairly simple three-step process.
Reviewing your credit state. You might think that you know your credit rating and that you know how good or bad it is, but it's always best to get the specifics checked out by ordering credit reports from trusted companies like Experian, Eqifax and TransUnion. AnnualCreditReport.com is run together by these three credit bureaus, and they give out credit reports free of cost. This website is the only place where one can have free credit reports. If you place orders on their commercial websites however, you will definitely be charged for it.
Reviewing the reports for mistakes. The problem with these credit bureaus is that they often tend to make mistakes and thus, report incorrect information, for example, getting the dates wrong. Therefore, your job after receiving your credit reports is to check each entry thoroughly for any inaccurate data. If you do find any errors or inaccuracies, it is your right to get them rectified. Remember that you must fill out forms separately for each of the three bureaus, on their separate websites.
Applying for the loan.Once your review is done and the bureaus are done processing your reports, they will give you a new credit report, which will reflect the positive (or negative) changes in your records. Every bad item that gets removed increases your chances of getting a good car loan. Start applying for a car loan from your local, closest bank or credit union.
Keep alternates. Keep the possibility in mind that your application for car loan may get turned down; in which case, you should have a backup. Apply to alternate sources of finance. It is true that the more credit applications you have, the lower will be your credit score. But as long as all those credit inquiries are made within a year, for the same loan type, they will all count as one single inquiry.
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