Tips for Buyers with Bad Credit
Tips for Buyers with Bad Credit
If you aren’t pleased with your credit score, buying or leasing a new vehicle can be a hassle. This is especially true if you’re buying a car for the first time. But you don’t have to go into the process unprepared. In fact, there’s several ways that you can improve your credit score over time. We’ve outlined some helpful hints for rebuilding your credit so that you can drive home in the car of your dreams.
Check Your Credit Score Beforehand
It might be unpleasant to check for bad credit, but it’s necessary. You need to know where you’re starting from, so you can chart a pathway forward. Your credit history is the chief determining factor in your credit score, which helps lenders determine your “creditworthiness” – or how much financial risk is involved in lending to you. Because they will be checking your credit history, you should, too.
Credit scores above 700 are generally considered acceptable and will qualify you for a lower interest rate. Several factors determine your credit score, including how long your financial accounts have been open, the number of open accounts and the consistency and percentage of minimum payments you’ve made on existing financial obligations.
Improve Score + Fix Credit Errors
If your credit score is less than 700, you’ll want to consider raising it before applying for your next car loan. Our finance department works with a wide range of credit histories, but you’ll benefit in the long run if you take steps towards better credit today. Interest rates significantly increase for people with lower credit scores, so you’ll want to start by making sure that there aren’t any mistakes in yours. If a clerical error caused your score to decrease, you’ll want to get that corrected as soon as possible to avoid high interest rates.
Make a Budget + Get Pre-Approved
Ideally, how much would you like to spend on a new or used vehicle? Your answer to that question depends on several factors, like the size of the vehicle, how much of a down payment you can afford, and how long you want to keep making payments. Once you compile your budget and factor in insurance and maintenance costs, you can get pre-approved using our simple online finance application.
Here’s the Plan: Big Down Payment + Shorter Term
Already pre-approved? Congrats! You’re one step closer to driving home in that sweet ride you’ve been dreaming of. Once you’re back from your test drive, head over to the finance department to discuss your options. We suggest planning for a sizable down payment, so that the amount being financed is smaller. Ideally, you should also look for loan terms of 60 months or less. All of this varies, though, depending on your credit history. Always plan on paying off your loan early so that you can build some positive credit.
But What If I Got Denied?
No need to fear! While being denied a loan is frustrating, there are several options available. Consider asking someone to co-sign your next car loan, or tackle the debt that’s bringing your credit score down to bring your credit score up. Most importantly – don’t get discouraged. It takes several months, and sometimes even a year, to rebuild credit. Give the process time. Our financial team is here to answer any questions you might have, or to discuss your finance options.
At Joe Cooper Dodge of Yukon, we work with customers from a variety of financial situations. If you're worried about what kind of vehicle you can afford, come visit us at our dealership located at 11001 W Reno Avenue, Yukon, OK 73099. We proudly serve customers from Mustang and Oklahoma City.