With a crippled credit status, you might feel compelled to shove aside your dreams of buying a car. But before you do so, you might be happy to know that there are sources that can offer bad credit car loans to help you drive home the car you want. Not just this, working with some car loan providers can even help you to improve your credit scores significantly. The best and easiest way to get settled for such loans is to get a cosigner to cosign on your loan. This could be a friend or a relative with a shining credit score. However, getting cosigner is no easy job and those of you who have tried securing bad credit loans already might have faced the bitter truth that it is difficult to get someone who would risk their credit on you. So, back to square one? Not really. If you are planning to buy your car from a dealership, there are a couple of good options for you to move on to. Let’s take a look at those.
Franchised new car dealers
These dealers deal in new cars and the auto credit loans they provide are acquired from a lender. It is the lender who holds the contract and it is he who receives your loan payments. This means that you are actually dealing with the lender via the dealership. This type of bad credit loan is particularly helpful if you are trying to rebuild your credit status since your payments are duly reported to the credit bureaus. The only disadvantage of these loans is that their interest rates are pretty high taking into account the cost of new vehicles. However, you have to hit upon the right dealer to get the maximum benefits.
Used car dealerships
You might give these a shot if you are interested in pre-owned cars. The loan payments are generally arranged on a weekly basis and are made to the agent directly. The best advantage of these dealers is that they rarely put your credit history under the scanner before arranging guaranteed auto credit loans for your purchase. Moreover, since the cars they offer are less expensive, the interest rates are low too. However, the most glaring drawback of these car loan dealerships is that they hardly report your payment details to credit bureaus. This means that you cannot reinstate your credit score at all. So if you need to make a purchase anytime sooner, you’ll find yourself in the soup yet again. Also there are chances that you might find yourself saddled with a lemon, only too late! But when there are no other options left for you, buying a beater from such dealerships might makes some sense.
Now, let’s assume you’ve bought the car. There’s still some work left for you to do. What’s that? Mending your credit score so that you don’t run into a repossession and get yourself stuck neck-deep into a financial mess. Here are some tips on how to avoid such a situation:
Make regular payments
Stop using credit cards till you improve
Keep checking your credit reports regularly
So, with some effort and a few smart choices, you can definitely hope to secure car loans against a lousy credit history and give yourself a second chance.