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The average American is sometimes taught that credit is for large purchases: homes, cars, or education. You might have even heard people advise you that credit cards or vanity purchases on credit were bad ideas. This line of thinking is what leads people to their very first credit problem, and the problem is this: a very short credit history can lead you straight into a bad credit score that isn’t reflective of your buying power. If you haven’t used credit a lot over the years, it is almost impossible to have garnered the kind of excellent credit score that most people aspire to have before buying a vehicle. No credit or a very short, small credit history can really prove to be a problem for many car buyers.
The more common problem for most Americans is a mixed bag of credit use. For example, you might have had excellent credit for a year or two and then ran into a medical crisis that required you to skip some of those credit payments and fall behind. Over time, you might have even given up on some accounts altogether. Do not feel alone. Some 13 million Americans have a credit score that is hovering below 500. Over 59 million have a score that is just “fair.” If you’re wondering how to buy a car with bad credit, you’ve got a lot of company.
The first step of any self-improvement project is to acknowledge exactly where you are and what you’re facing. If you’re a car buyer with bad credit, you know that you’re going to need a helpful team on your side in order to get a deal done. If your credit is on the higher end of “bad,” then you might want to first attempt to improve your credit a bit before borrowing. We suggest that you:
If you’ve got poorly established or outright poor credit, the first peace of mind you should have is that millions of Americans are also in the same boat you are. That doesn’t put a car in your driveway, though. Car loans for bad credit are out there and can help you, but not every dealership works with bad credit borrowers. You’ve found a dealership that works with bad credit borrowers. That’s us: Heyward Allen Toyota. Step one for obtaining car loans for bad credit is to find a dealership like ours. We understand that life sometimes happens when you least anticipate it. If your credit is less than “fair” then our team can help.
Suggestions for Bad Credit Car Loans
1. Down payment: If you’ve got a subpar credit score but a larger down payment, this can make it easier to get a deal approved with an open-minded lender. The money down shows that you’re willing to stick with a long-term loan. The more you invest, the more you have to lose, and lenders know this. Work on getting a substantial down payment before applying. If this isn’t an option, then there’s even more you can do.
2. Co-signer: A co-signer is someone who has enough faith in your repaying the loan to sign their own name on the dotted line. If you can’t pay, the co-signer will be responsible. Many dealerships, ours included, welcome bad credit borrowers to bring along a co-signer when they finance a vehicle. This looks very good to a bank.
3. Budget: Be flexible with your budget. Sometimes if you buy a cheaper car, you’ll find yourself approved for bad credit car loans. When you go to buy a vehicle and know you have bad credit from the beginning, be very realistic about what kind of car you’re going to take home.
What is bad credit?
Credit scores range from 350 to 850. FICO considers “good” credit to start at about 670. That doesn’t necessarily mean that 668 is “bad.” It just means that the further down the number goes, the closer to 350, the worse your credit is.
Can you help me even if I don’t have a co-signer?
Of course! A co-signer can simplify things and speed it up, but we still work with lenders who don’t necessarily require a co-signer.
Does my income help?
Yes, there are times when a great income can offset credit. This will especially come in handy if you’re trying to throw in a larger down payment. Most experts recommend that your monthly car payment be about 15% of your monthly income.
Do you work with people who haven’t established credit?
We work with all types of borrowers. The only requirement for working with our finance department is that you actually want to go home in a vehicle from our dealership.
If you would like to learn more about how to buy a car with bad credit, please contact the team at Heyward Allen Toyota.
