Credit and your Car Loan
Know your credit score first.
Your credit score determines your creditworthiness. Unless you are buying your car for cash, you must know your score before you go to a dealership to look for a car.
A score of 720 or above is considered excellent. With this high a score any dealership will put you into the car you want today.
Most lending institutions consider a score 620 or less as sub prime. A sub prime loan simply means that you can get a loan, but will most likely have to pay a bit higher interest rate. It is the lack of sub prime loans today that is causing trouble in the housing market and that in turn effects the automotive marke.
If your credit score is below 550 the chances of getting a loan are very poor. Our advice at CarloanASAP is to clean up your credit, get it over 600, this will make it much easier to find a loan for the car you need.
Factors that determine what your credit score
Payment history. This one is big. How timely have you made payments, the amount you owe creditors, if you have made payments late are all part of your credit history. If you improve these factors you will improve your credit scores.
Outstanding balances. Owing a lot on many accounts doesn’t always hurt your score, but if you’re at or near your limit on your credit cards your score will be affected. Try not to max out your credit cards.
Credit history. If you’re just starting to build a credit history, there’s not much you can do to improve your standing. Running your own credit report will not hurt your score.
Credit type. What matters is your personal mix of installment loans, mortgages, retail accounts, credit card and finance company accounts. Paying off a credit card is one thing, but lending institutions look at how you pay off larger purchases. As silly as it sounds having a great credit score with no major purchases will hurt your chances of getting a better interest rate.
Improving Your FICO Score
Raising your FICO credit score takes time, there is no quick solution to this. In fact, a quick-fix can backfire and cause more financial trouble in the short term. Here are some great tips on improving your credit score that will definitely work for you regardless of where your credit score is at. You can use these tips before you look for your car, during the process or at any time in between.
Pay your bills on time.
Late payments and collections can have a negative impact on your score.
Get current and stay current.
The longer you pay your bills on time, the better your credit score.
Paying off a collection account will not remove it from your credit report.
Collections stay on your credit report for seven years.
Keep balances low on credit cards
A high level of debt effects your credit score so do your best to keep your debt as low as possible.
Pay off debt rather than moving it around
The most effective way to improve your credit score is to pay down your credit. Owing the same amount but having fewer open accounts will lower your score.
Don’t open a number of new credit cards that you don’t need
This approach could actually lower your credit score.
Re-establish your credit history
Opening new accounts responsibly and paying them off on time will raise your credit score.
CarloanASAP can help
You are at this blog because you have credit issues and in every case experts will tell you that paying off major purchases will greatly improve your credit scores. Now a major purchase would be a car, home, boat etc. and in this case we are talking about getting the car you need. CarloanASAP is here to cut the clutter of information, give you good advice on how to buy a car, improve your credit in the process and to help make this process as painless as possible.
The first step is knowing your options and the next is to take effective action.
Apply for help in this loan process here…it’s fast and free.
Buying a Used Car vs a New Car (part 1)
Everyone wants a new car at some point in their lives, but if you have credit issues then going after a used car can be your best option. New cars cost a lot more to purchase and let’s face it, one of the reasons you might have credit problems is that you make less than your bills. In a lot of ways looking for a new car can defeat your main purpose which is to get reliable transportation.
Pros
New cars rock, we know that…if you’ve ever purchased a brand new car you know how fun it is to drive it around to your friends and all the while that new car smell fills your head, the leather seats, the way it looks all shiny and perfect. You get it home and in the driveway all you can do is look at it. Whenever you go to start that new car it comes to life immediately and the engine sounds perfect. With a new car we all fall in love with driving all over again…but…
Cons
It is a fact that new cars lose about 40% of their value within 3 years, but they also lose a lot of value literally as you drive them off the lot. The moment that new vehicle leaves the showroom it is considered used and when you consider all of the costs involved in the initial purchase you need to know that all of those will be lost.
With used cars, their previous owner have absorbed most of the car’s depreciation. Buying used means that you will be paying less to drive the vehicle. Here are some of the benefits of buying a used car:
- No sales tax
Lower purchase price
Lower financing costs
Less depreciation
Cheaper registration and license fees
Lower insurance rates
Just remember that in looking for a car you should have two main goals, first is to find reliable transportation and second to help repair your damaged credit. Incurring bills that are harder to pay will not help your financial situation so keep in mind that a used car is your best bet to reach your goals.
Buying a Used Car vs a New Car (part 2)
Buying a used may be your best financial decision, but getting a good used car for a good price can be challenging. You should:
Decide what car you want
Find that model
Learn the value of the car
Evaluate the car’s condition
Research
Consumer Reports has great information about the quality, reliability, safety, and insurance rates, of any car you might be interested in purchasing. Now to get access to these articles online you must pay a monthly subscription fee or $3.95, but it is well worth having unbiased information to work with from the start.
Finding a Good Used Car
There are obvious places to look for a used car like newspapers, but your best bets are used car lots, and new car dealers. Today most good dealerships have extensive online exposure so you can do a lot of shopping locally from your computer, but remember that the car you like might not be there when you visit.
Pricing
To find out the value of a specific car in your area, you can use the Kelly Blue Book. This publication is the bible on used car pricing and is used by dealerships and banks alike. You might also take a look at local papers or magazines that have used vehicles displayed. Now this is not specific to the car you want, but it can give you a strong ballpark number to work with when you go in to negotiate for the car you want.
Evaluating Used Cars
A little knowledge, common sense and a some professional help are the keys to knowing what kind of condition your next car is really in. There is a lot of information on the web so use it. You will be amazed at how many forums there are on cars and with a bit of looking and help from the Google Gods you will be able to find out a lot about the model of car you’re looking to purchase. The first key is to do your homework on the car before you go to the test drive phase.
Before you take the time to test drive any car check tit’s title. By checking the title, you can learn if the car:
Was returned as a lemon
Has ever been totaled
Has been in a natural disaster
Was ever repossessed
Had its odometer rolled back
To check the title, go to CarFax to access their database of over 750 million vehicle records. You have seen their ads on TV and believe me it is worth the money.
Finally, after you’ve checked out the title, inspected the car, and taken it for a test drive, you might consider a small investment to take the car to a trusted mechanic for an unbiased diagnosis. Most good shops have all the gear to test the car thoroughly and by doing this you will have the peace of mind in knowing that the car you want is in good running condition.
Avoid Dealer Scams
Car dealer scams when you have bad credit
If you need a new car, but have credit issues there can be a lot of things going on that cause people to have a ton of anxiety when looking for a loan. If you have been online and looked at various websites about buying a car then you are probably even more confused. Let’s face it, everyone has heard of dealer scams and nobody wants to be a dealers next victim.
If you have perfect credit then a dealership will fall all over itself to get you the best car for you and the best loan, but if your credit is bad you feel like a target for scams. At CarloanASAP we want you to feel safe in purchasing a new vehicle so we want to arm you with good information first.
Interest rate scam
Here is a scam that everyone with credit issues will fear. Because you have poor credit the dealer charges you a very high annual interest rate (APR). Next you worry about the bank requiring you to buy the extended warranty, the dealership offers to sell you VIN etchings and the list goes on. Some lenders will have expectations, but these will be spelled out if your loan is accepted. All of this is all tied to your credit so it is very important to know your credit score before you get into the process of looking for a loan.
What we do for you
At CarloanASAP our philosophy is to make car buying as painless as possible…we have 3 simple steps.
- Fill out our simple application. Once we have this information we can look at your credit issues with your approval.
- We take your information and shop that around locally to find a dealership that has a good inventory of cars and one that will work within your credit restrictions.
- You will be contacted by our people and a local dealership. They will make and appointment for you to meet with their finance people, show you cars in your price range and help you get the vehicle you need.
Get a Car Loan ASAP
Get an auto loan with bad credit
Credit is tight these days; if you get behind on payments for your home or car your credit score will fall. You need a good car, but how do you get loan with poor credit? CarloanASAP helps people with credit issues. When you have bad credit due to bankruptcy, divorce or slow payment many lenders will shy away from you, but we have developed a network of dealers that want your business.
Getting You Back on the Road
Just because you’ve had bad luck financially doesn’t mean you will have to walk. Purchasing a good used car can set you on the road to credit repair. Paying on time will lead to a higher credit score.
Used Car Prices
Local car dealers keep used cars on their lots for people just like you. They know that just because you have bad credit you can still get a vehicle at several dealerships in your area. The dealers we work with at CarloanASAP want your business. They have good cars ready for you to buy at a price you can afford.
The process is simple
All you need to do right now is to fill out our easy form to start the auto loan process, this is the first step in bad credit repair. Next we will look over your application and send it to a local car dealership that works with bad credit lenders. Finally the dealership will call you to make an appointment, all you have to do is go there and pick out your next car…it’s simple. Click here . The form is simple and we will do the rest.
When Buying a Car
Car Buying Do’s and Don’ts
Do: Check the car through Carfax, it will show you if the car was in an accident or has had an odometer changed.
Do: Ask someone knowledgeable to inspect the car, it may save you a lot of money.
Do: Do your homework, it is important to know a few models that would fit your needs and budget. Being prepared lowers your risk of buying the wrong car.
Don’t: Don’t go for the first hotrod you see, buying a car is an emotional decision yes, but you have to have a good idea of your needs first.
Don’t: Never buy a car that has been in a front-end accident. Check for unmatched paint or misalignment of the bumpers. A car that was in a front end accident will never be right and could have frame or engine problems you might not see right away.
Don’t: Avoid cars that need “minor repair.” They may seem like a fair deal, but you never know what is lurking behind a few scratches.
Credit Tips
Bad Things Can Happen to Good People
Good credit is something we would all love to have, but bad things do happen to good people and that includes credit problems. It is a common thought that people with bad credit ratings can’t get a car loan. This is simply not true. Millions of cars are sold every year and there are many good local auto dealers that want your business.
Having bad credit could mean higher interest rates, more strict re-payment options or even tougher down payment terms, but this is to be expected. Problems with credit might mean a compromise on your choice of a car. On the other hand settling for a car that costs less will mean you’ll have a much better chance of making your payments. Think of it as being able to get a car now, and the opportunity to regain a good credit history.
The first step in repairing your credit is to get your credit report.
Make sure the information on the report is correct, such as your date of birth, your address, and the list of your creditors. If there are errors on your report send details of the errors to the credit bureau that your copy came from. After corrections are made, a fresh copy of your report will be sent to you. Check this new report for factors contributing to the bad credit like late payments, frequent credit applications, or a large number of lenders making inquiries.Having problem credit and looking for a bad credit auto loan a local car dealership the most obvious place for one to look for a loan and a great place to purchase the car you need.
Knowing your credit score
Knowing your credit score is your most vital statistic, and definitely controls how high an interest rate you’ll pay for your car loan. If your credit score is below 680 do not submit applications to a lot of websites online, this will lower your score. Instead it is a good practice to go to a site like CarloanASAP that specializes in matching people with bad credit scores and local dealers that are looking for your business. These dealers have lots full of cars to choose from and lenders that specialize in high risk car loans. Even if you have a bankruptcy, or tax liens, but your credit score is 525 or above, your chances are good to get the loan you need.
3 Quick Tips
- Be Prepared. Do as much research as you can. Read reviews, consumer reports, examine reliability ratings. Your goal should be to narrow your search to a few car models that will work for you and what you can afford.
- Check the Car’s History Records. Cars that have been in accidents or have outstanding liens should be eliminated.
- Don’t Buy Based on What You’ve Been Told. What you have been told may not always be true. Check out the car very carefully. Look for obvious signs of dents, leaks, poor tire wear etc, if you need help then bring a friend that knows cars.
