Finding An Auto Loan - Even With Bad Credit

Author: Gregg Pennington

Article:
If you have bad credit, you will likely encounter some
difficulty getting an auto loan. In some cases where a person's
credit report is very poor, they will not be able to get a new
car loan, but can probably still obtain the financing to buy a
used car. If you find yourself in this position there are a few
things you can do to improve your credit, improving your chances
to be approved for an auto loan and also get a lower interest
rate.

The first step is to take a close look at your credit. Even if
you believe your credit is poor, it may be that it is considered
moderate credit. Request a copy of your credit report and credit
score. Your credit score is a number between 300 and 850 that is
used as a baseline to determine your eligibility for different
types of credit. If your credit score is below about 550, you
may find it very difficult to get an auto loan. 550 to 675 is
usually considered moderate credit, while a score above 675 is
considered excellent credit.

The credit score is only one part of the picture when applying
for an auto loan. The other factor is your credit history report
. This report contains details of your debts and the timeliness
of your payments. It will also reveal the number of open credit
accounts you have, and whether or not you have filed for
bankruptcy in the past.

After you have received your credit report, make sure that all
the items on it are accurate. Inaccuracies can make your credit
appear worse than it actually is. If mistakes are discovered,
the law requires that the item be removed from your credit
report within 30 days; in fact, anything can be removed from
your credit report if the creditor in question does not respond
within 30 days. Removing negative items from your credit report
is one of the most effective things you can do to improve your
credit.

The next step to getting a car loan with bad credit is to clear
up the legitimate problems that affect your credit history
report. Pay down excessive credit card balances and close any
unnecessary credit accounts you may have. As you pay down the
balances you will lower your debt to income ratio, thereby
increasing your chances of getting an auto loan with a low
interest rate.

Once you have made all possible improvements to your credit, the
final step is to compare lenders to find the terms you want and
the best available interest rate. Whether you decide to purchase
a new vehicle or a used one, be realistic about how much you can
afford to pay every month. You don't want to tarnish the credit
you have been working to improve. Building a record of timely
payments on your auto loan will help strengthen your credit, so
that the next time you finance a car you can put more money into
your automobile, and less in your lender's pocket.

About the author:
Gregg Pennington writes articles on a number of topics including
auto loans, loan consolidation, credit and debt. For more
information about auto loans visit
http://www.onlinemoneysources.net/auto-loans.html.
To find a loan or other sources of money visit
http://www.onlinemoneysources.net.