How To Buy A Car with Bad Credit

The truth of the matter is that most people have some work to do when it comes to improving their credit score, and sometimes the things that influence our credit are out of our control. And once you fall behind, it can be hard to try and play catch-up. As an authorized bad credit car dealership in Columbus, The Credit Factory is dedicated to helping you "restart your credit". Our finance department will do its best to get you a car loan even if you have a bad credit history. We'll do everything we can to get you behind the wheel of a car, truck, or SUV that perfectly matches your needs and budget.

What Should I Do First?

If you don't know where to get started, we recommend first reviewing your credit history. Making sure there are no errors or blemishes that you're unaware of is important, especially when applying for a bad credit car loan. Next you should determine how much you want to pay (payments and price). You should have an idea of how much you're comfortable with when it comes to a down payment and monthly payments thereafter. This will especially help our sales advisers find the perfect vehicle to fit your lifestyle and your budget. Finally, prepare your documentation. Bad credit car loans require proof of employment and income. It's particularly helpful to have your documentation on hand in case you're asked for it. You may not always need this documentation, but it will help speed up the process if you're prepared.

What's My Credit Score Right Now?

Do not simply assume your credit score is low. Figure out for yourself what your credit score is, what has had an effect on your credit, and make sure there is no suspicious activity on your report. Then, bring your credit report with you when you meet with the finance staff at The Credit Factory. We could be able to help you identify the reason for your low credit score. Keep in mind that you can get a complimentary credit report once a year.

Do You Really Need a New Vehicle?

If you're looking to buy a car with bad credit, it will always be the case that you'll pay more than someone with good credit. This protects the banks that lend you money. That's why if it is already challenging to gather additional money for your typical budget, you should only opt to get a loan on a car, truck, or SUV with bad credit if the situation is really an emergency. Take a look at your transportation options to determine if you have other choices such as repairing your current car, carpooling with friends, family, or colleagues, or riding the bus for a few months or more while you work on improving your credit score. Just a handful of months of paying bills on time can bolster your credit score. If you can put off buying or leasing a car for a month or two, you may end up with a high enough credit score to get a lower interest rate.

If You Can, Select a Shorter Loan Period

Interest rates are usually lower for briefer auto loan periods, which means that you will end up paying less for your vehicle overall. This also means that when you are done making car payments, you can focus on paying off other loans and continuing to strengthen your credit score before your next purchase. Then you can think about leasing another car with a lower rate, or buying one with Ford, Genesis, Hyundai, Kia, Mitsubishi, Nissan financing options, and having the best interest rate possible.

Should I Search for a New Car, a Late-Model Car or an Older One?

You may believe that an old car will cost less, but in fact interest rates are higher on vehicles from many years ago. Try shopping for new cars at first, then newer used cars, because these are the vehicles that usually have the lowest interest or lease rates. Receive the most favorable deal you can, given how much YOU are able to afford to spend on a car payment. It is still likely that you could find a more favorable offer on a used car, so make sure to check out all of your options before making your final decision.

Do I Need a Cosigner?

Depending on your financial situation, having a cosigner for your auto loan could be the right choice to get a more affordable rate. Think about looking for a cosigner if you don't have steady income, a high debt-to-income ratio, or your income is lower than the minimum required for a loan. Cosigning on a loan is a huge responsibility. Your cosigner will be accountable for making payments for you if you are not able to, so only acquire a cosigner if you are certain you can make monthly payments promptly. If you can make your monthly payments, getting a cosigner might help decrease the sum you have to pay. We hope this guide has been useful. If you have more concerns about buying or leasing a car with a low credit score, just call our Ford, Genesis, Hyundai, Kia, Mitsubishi, Nissan finance team at 614-836-6210. With good or bad credit, we would be happy to help you buy or lease a car in Columbus.