Bad credit complicates everything, including buying a car. Bad credit is typically defined as a credit score under 629, and you can fall into that category for a number of reasons, including a history of late payments, identity theft, or just a short credit history. A low credit score generally means banks and lenders will introduce higher interest rates, making it difficult to buy a used car with bad credit. Luckily, bad credit does not necessarily destine a car buyer to high-interest rates. This guide from Paul West Used Cars, a no credit car dealer, will help car buyers overcome their bad credit to find the perfect used car in Gainesville, FL.
Check Your Credit
The first step a prospective car buyer should take is to check their credit score. It is important to go into the car buying process fully aware of your credit score, rather than accept someone else’s word for it. Car buyers who are aware of their credit score can clean up their credit by paying off credit debt, disputing credit report errors, or adding positive information to their credit report. Car buyers should bring their credit score to the dealership with them to ensure that they and their lenders are on the same page.
Find The Right Dealer
The key to buying a car with bad credit is finding the right used car dealership in Gainesville. At Paul West Used Cars, we offer in-house financing with flexible credit requirements, making getting approved for a car with bad credit or no credit a breeze. Simply fill out our online auto loan application to begin, and one of our representatives will be in touch soon.
Set A Realistic Budget
It is important for prospective car buyers to be realistic about their budget. Taking on a loan with monthly payments higher than you can afford will only serve to further damage your credit score. When determining a budget for buying a used car, be sure to factor in interest fees in addition to the sticker price of the car. The amount of the monthly car payment is dependent upon the size of the loan, the interest rate, and the length of the loan term. Bear in mind that while longer loans do offer lower monthly payments, additional interest charges will result in a higher cost overall. If possible, it is best to elect for a shorter loan term.
Make A Bigger Down Payment
Credit isn’t the only factor determining whether a loan is approved or denied. Lenders are more likely to deny a loan application if they feel the amount is outside your means for repayment. Offering a larger down payment will reduce the loan amount and better the chances of approval. A down payment can counteract the taxes, interest, and fees, offering a wider selection of pre-owned cars from which to choose.
Pay Your Loan On Time
Remember that the loan process doesn’t end when you drive off the lot in your new car. In fact, what happens next is just as important as the steps that came before. Auto loans can be important tools in rebuilding your credit. Car buyers who make loan payments in full and on time each month can see a drastic improvement in their credit score, as payment history accounts for more than a third of overall FICO credit score calculations.
Conversely, just one delinquent payment can devastate an overall credit profile. The simplest way that car buyers can avoid delinquent payments is by setting up automatic payments through their bank account, so the money is automatically transferred every month.
The right used car dealership in Gainesville will work with car buyers to find the right car for them, regardless of their credit score. Contact us today to get started!