A poor credit score might be problematic for people who want to borrow money through credit cards, mortgages and loans. Most lenders and banks refuse to provide an auto loan, if an applicant has a bad credit history. However, there are plenty of financing options for such buyers. If you have a bad credit history and don’t have enough time to improve your credit score, then the dealer might trick you by lying about lender to convince you to buy extras (such as an extended warranty, insurance or credit life) and pay extremely high interest rates. Sometimes, they provide fake details of your credit score. By following few simple tips you can avoid such car credit problems.
Get you credit history: It’s important to know your existing credit history, before visiting a dealer and asking for financing. This will help you know the interest rate you might be offered. You can check your credit score or report online and calculate monthly payments by using loan payment calculator tools.
Avoid car financing options and extras into high APR loans: This is the most common mistake made by the buyers with poor credit score. You don’t need to buy extended warranty or insurance or pay high interest, if you are paying 18% APR (annual percentage rate). You can buy all these things without high APR and the dealer markups.
Be extra cautious while trading-in a car with a loan balance: Many times buyers, who trade in a car they owe money on, later get to know that the dealer hasn’t paid off the money in the specified timeline. And when the bank or lender calls them, they become responsible for the scam, as the old car’s loan is on their name. Therefore, make sure that the gives you a written commitment, stating that he will pay off car loan in the specified time.
