Car Loan Financing With Low FICO Scores
There are few things as bad as a bankruptcy, foreclosure or having no credit when it comes to getting an auto financed. However, you can still get car financing it just will require a little more work.
With a really bad FICO rating, things are little easier because a bad rating is not as bad as having no credit. Some companies might not approve your new car loan, others will approve you and even offer a good or reasonable terms and payment rates.
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Obtain a copy of your credit report, and confirm that it does not contain erroneous and derogatory information. It is estimated that 90% of credit reports contain incorrect information, it is essential to clear this up for occurances that are negatively effecting your score.
What should you look for? Look for anything incorrect, for instance your contact information, loan summary or derogatory debt information that is older than 7 years can and should be removed.
Bad credit car lenders allow you to finance an automobile you otherwise could not get. Derogatory credit information should only stay on your record for 7 years, and 10 years in the case of a bankruptcy. Any reportings older than that should be addressed. Some creditors use fraudulent tricks to keep the past debt on the report.
This practice is illegal and a violation of the Fair Debt Reporting Act. Wherever you find a fraudulent report contact the company and if they still won't remove the offense you may want to contact a credit attorney.
Any item that does not correspond to your credit history should be reported to the credit bureaus, Equifax, Trans Union, or Experian, for clarification.
You can add a small entry to valid derogatory entries explaining a sudden illness, car accident, etc. Creditors usually take this information into account, giving you extended credit, or better rates and terms that otherwise they normally would not.
Do the research online for the best new car loans before signing the dotted line, because there are numerous online finance companies offering good terms and payments even with your past credit history.
You will be surprised how easy it is to get approved online and get a car loan for automobiles not older than 5 to 7 years and priced up to $15,000.
Further information on bank loan and borrowing responsibly can be found here: bank financed auto lenders. Additionally, alternatives to bank financing is to use Buy Here Pay Here dealers. These dealers self finance the car which means they hold the paper for the car loan essentially acting as the bank. The payment terms are usually rough including things like weekly payments.
Be aware, most Buy Here Pay Here's do not report to the credit bureaus and any deal with them will not improve your credit score.
Even though interest rates are higher than the average car loans for people with bad scores from a financial institution it's an alternative for people who want to borrow a little money to buy a car if all other options for achieving a car loan have failed to gain approval.
Lastly, now that you have been approved for a new car loan, do not miss a payment or make late payments. You're re-building your credit history and correcting the mistakes of the past will help you qualify for better and larger future loans. Pay on time every time. Over time, this on time payment of your chosen auto loan will improve your credit, allowing you to apply for other bad credit car loans and obtain better rates as you rebuild your scores.
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