Can I Get a Car Loan With Bad Credit?


Whitney russell

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car buyer buying a new car
Many dealerships will work with you to finance your new ride … even if your credit score is less than stellar

Need a new vehicle, but have bad credit? Getting a car loan may be more achievable than you think. Here are some strategies to increase your success before applying for a car loan and finalizing the deal with your chosen lender.

Improve Your Credit Score: Learn more about Zingo

Strategies for Successfully Obtaining an Auto Loan

Know your credit score … and increase it if possible

Check your credit score if you haven’t done so recently. If your credit rating is in the “fair” or “very bad” category, do what you can to increase your credit score before applying for a car loan, as Jack Ferry and Rachel Witkowski of Forbes suggest. Make sure you pay your bills on time and correct any errors you notice on your credit history.

Provide proof of stability

Gather documentation that proves your personal stability. According to Ferry and Witkowski, lenders will usually ask you how long you’ve been at your current residence and workplace. It is good to have recent pay stubs and proof of your address on hand.

Establish a budget

Budget for what you can afford to spend on a vehicle, recommend Ferry and Witkowski. It is best to do this before you start buying cars and applying for a car loan so that you don’t be tempted to buy a car that is not in your price range.

Save for a down payment

Take the time to save for a down payment before applying for a car loan. According to Hanneh Gundersen of Bankrate, this increase your chances of being approved for a car loan despite a bad credit history. You will also want to do as big as a down payment like you can. This shows the lender how serious you are about paying off the car loan, says Experian’s Stefan Stolba.

Obtain pre-approval

Get pre-approved for a car loan before setting foot in a dealership’s field to find your new vehicle. Dealers will be more likely to work with you to obtain financing if you have already been approved by your bank or credit union.

Take the tour … and check with the dealers

Find the best auto credit before committing. Many car dealerships offer on-site financing either through a partnership with another lender. And some dealerships offer financing through an auto loan finance affiliate of a car manufacturer, such as GM Financial.

Discover the advantages of a car loan. Next, increase your knowledge of how a car loan works.

Bad credit? Find out about the special CARR Chevrolet financing program

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