Is it possible to buy a car with bad credit – 7 steps

Being in the market for a new or used car can be a lot of fun – it’s great to fantasize and research the different types of cars you could buy.

However, the whole process can also be stressful. In particular, it’s stressful when you realize you’re going to be fighting an uphill battle when it comes to getting approved for auto financing.

Your worries will be further multiplied if you discover that you have a bad credit score, say, one below 650 or even 600. A bad credit score can make it much more difficult for a lender to approve your application at a reasonable rate.

If you’re interested in making a bad credit car purchase, here’s what you can accomplish in 7 steps:

1. Find out which model you like:

Just like every time you buy an expensive item like a car, start by narrowing down your options to a certain make and model of car that you like. Try to balance price considerations with something that meets your needs.

2. Choose a car year / condition combination that is within your price range:

Now, focus a little more on the year and the condition of the car you can afford. For example, you might want a 2005 in good condition or a 2003 in excellent condition (both could be priced the same). Do your best to find a make / model / year / condition combination that meets your needs but saves you as much money as possible.

3. Decide how much money you can raise for the down payment:

The more money you can raise, the better your chances of being approved for your bad credit car purchase. Why? Because more money as a down payment means less to borrow. This will translate into a better chance of getting your loan approved.

4. Take a look at your latest credit report from TransUnion or another major agency:

There are now 4 major credit bureaus including TransUnion, Innovis, Equifax, and Experian. Request your latest report from one or more of them.

5. Write the credit bureau about any credit report errors you find there and have them removed:

Read your report carefully, paying particular attention to anything that does not reflect favorably on you or your credit history. Be proactive in contacting them to remove these items if they were reported in error.

6. Take an organized approach to applying for a bad credit loan:

Now before you start applying to bad credit car lenders, take an organized approach. Use a spreadsheet application like Excel and keep track of the details of each lender. Include contact information, details of loan terms, and of course interest rate information.

7. Don’t be afraid to go back 1-2 more times to each lender for a better deal:

As you start getting loan offers, check back at least one or two more times and see if you can get an even better loan offer.

Follow these 7 steps to buying a car, even when you have a bad credit score.