A bad credit score may make it a challenge to buy some of the necessary things of life such as a car. It is tricky to find a car loan with a bad credit score you may face difficulty in getting a loan if your credit score is below 620 which is considered as an average score. You may not find a loan at all if the score is below 550. However, there are certain tips and tricks you can utilize and get guaranteed car loans with bad credit.
Improve your Credit Score before Going for Car Shopping:
This is the easiest way to never fall in problems such as a bad credit score. The moment you think of buying a car check your credit report and improve your credit score if it is bad. In order to improve your credit score, you can use your credit card and apply for a personal loan. Settle your credit card payments and don’t apply for one in a long time. It will gain you more than 100 credit points within months. In this way you can clean up your past credit scores. You can get guaranteed car loans with bad credit if the bank sees that you are making efforts and improving your credit scores.
Get a Co-signer for the Car Loan:
You can always ask a friend or a close family who has a good credit score to be your co-signer while getting the car loan. In this way, your bad credit score will be subsidized by the good credit score of the co-signer. The co-signer acts as a guarantee in such loan agreements. Here both the signers are liable to repay the amount A co-signer can hence help get you a guaranteed car loan with bad credit as well.
Get Pre-approved Loans:
This is the trickiest part of getting car loans with bad credit. You will need to visit the banks and talk to their loan department guys and convince them in person to provide you with a car loan. Show them your potential and the genuine reasons why you have developed a bad score. You can show them your income tax returns, salary slips or business turnover results etc. In some cases you can get a pre-approved loan.
Make a Lump Sum Down Payment:
The best way to lower your rate of interest per annum is making a huge down payment. When you are given a loan with a bad credit score, usually the interest rates are very high. If you make a good lump sum down payment at the very beginning this will lessen the rate of interest and also create a good trustworthy image to the lenders. It can also help to lessen the extra tax and charges which you may pay to the car company owing to the bad credit score. A lump sum amount will get a guaranteed car loan with bad credit and be a medium to improve upon your overall scores.
Force Close a Loan to Boost up your Credit Balance:
If you are willing to boost up your credit score, just force close a loan within a few months of taking it after making some of the EMIs. It will immediately boost up your credit score. In this way you can enjoy hassle-free loans In future.
Making a lot of preparation is necessary when you have made up your mind to get a car loan for your car shopping. Guaranteed car loan with bad credit can come from any source and hence an extensive research is recommended. Make sure to go through all the terms and conditions before signing for a loan at all times.