Being approved for a car loan or finance when you have bad credit is not easy. This is because many lenders will be reluctant to lend you their money if you have very high chances of not paying it back as reflected by your credit. However, the good news is that some reputable lenders may be willing to give you a second chance provided that you give them a good reason to finance you. This means that you need to tick the right boxes on a lot of things.
To help you increase your chances of being financed for a new car on a bad credit, here are tips to see you through.
Always Be Honest On Your Previous Credit History
It's very important to be honest in all the information you provide when applying for a car financing on bad credit. This is because every lender willing to finance you will closely look into your statements if you have a bad credit. You don't want the lender to find something that you failed to disclose because this might change their desire to finance you.
While honesty is not a guarantee that you will be financed, withholding information can raise red flags that may cause your application for the loan to be declined.
Go To Your Credit Union or Bank First
Sometimes it's good to start trying your luck close to home. Even if you are not sure whether you can get a loan, go to your credit union or your bank, especially where your checking account is. Find out whether the institutions offer auto financing. They may even have better rates and terms for their members.
Have a Good History of Credit Card and Loan Repayments
Bad credits may sometimes just be caused by unfortunate things such as losing a job. For this reason, if you've demonstrated consistency in repayment of loans before, you might increase your chances of qualifying for the car loan. For your credit card, if you previously paid more than the required minimum monthly payments, your application can be favourable as well.
Look For More Information on Unclear Entries In With Your Credit History
Before applying for a bad credit car financing, access all your credit files online to understand your exact position concerning your credit. Unclear entries in your credit history should be solved by contacting the institutions or organisations that are listed in the entries for clarification.
Doing this will enable you to have clarified and adequate information upfront, which means that your lender won't have to go through that trouble. This is important because it helps make the application process faster. It can also help build confidence in the lender's mind. For more information, talk to a bad credit car finance professional.