Having bad credit can cause difficulties when buying a new or used car if you need a loan.
However, most people with a low credit score have options that will allow them to get the car they want.
About your credit history and why it is important
Just to be clear, anyone who has ever had a loan, mortgage, or credit card has a credit history file. That file is a detailed report of every loan or account a person has had. It shows account details, credit amount, current status and balance, and payment history. If there have been late payments, missed payments, repossessions, bankruptcies, or foreclosures, those are also in the file. Negative information in the file can remain there for up to 10 years.
When you apply for an auto loan, the lender (dealer, finance company, bank, or credit union) will check your credit history to determine your credit worthiness — which is a measure of how likely, or unlikely, you are to keep your promise to repay your loan — based on your past performance.
However, car dealers and finance institutions don’t take the trouble to read your detailed credit report. Instead, they look at your credit score, which is a numerical rating that summarizes your entire credit history.
Continue reading Bad Credit Car Loan – Options
Can I trade my car if I have bad credit?
It’s like the answer to a lot of other questions, it depends.
It depends on how bad your credit is, what dealer you want to use, where you’ll look for financing, and the status of the existing loan on your trade vehicle.
Let’s take a look at how it might work.
I need a new car, and have a car to trade, but my credit is not good. How does it work?
In this case, it’s good that you have a vehicle to trade because it can be used as a down payment on a new vehicle loan — assuming you are not “upside down” and have some equity to use as trade credit.
Continue reading Trading Car With Bad Credit – Explained
Is it possible to get a car loan with no credit?
Yes, it’s possible and, depending on your particular circumstances, you may have several options available to you.
With no credit history, you may still have a credit score, although it isn’t likely to be very high, but enough to get you in the door with a car loan.
Since there are no hard-and-fast rules for how banks, credit unions, and auto finance companies handle no-credit situations, we’ll offer a number of suggestions, but the real secret to getting approved is to try, try, and try again at different dealers and lenders to maximize your chances.