Getting a car loan if you have bad credit might seem like a daunting task, but in actuality it’s not as difficult as one might think. What really matters is how prepared you are before you start applying for loans. If you’re in the market for a new or used vehicle and you’re not sure what your credit might look like to lenders, you should order a free copy of your credit report before you start applying for loans. Your credit report won’t tell you your credit score, but it will give you a chance to fix any errors or inaccurate information in your credit history before potential lenders run an inquiry.

As was mentioned before, your credit report won’t give you your credit score but you can get access to that all-important number from each of the three credit bureaus; Trans Union, Experian, and Equifax. If you have bad credit, it is extremely helpful to know your credit score before you start looking for a loan. Your credit score will help determine the interest rate you will pay on your loan, and whether lenders will want to grant you credit to begin with.

According to FICO, credit scores range from 300 to 850. As with most scores, the higher, the better, and the same goes for your credit score. A credit score of 720 and above is considered excellent and a person in this range will have the easiest time obtaining a loan, and will also get the best interest rates from lenders. A score of 620 and below is considered subprime to most lenders, and although it doesn’t make a person in this range “untouchable” to lenders, it does put you in a higher risk category as a borrower and subsequently will make it harder to get approved for a loan as well as facing higher interest rates.

Rates vary from lender to lender, so take the time to do research and see what deals are available. Lenders typically define their business according to credit tiers, so speaking with a loan officer about how each tier is linked to credit score and interest rate will make it a lot easier to compare your options. Knowing your credit score before you go to lenders will make it easier for you to target the appropriate grantors in your search for an auto loan. And you don’t have to limit possible lenders to just your bank. Many credit unions are beginning to expand their business to include those with less-than-perfect-credit. And car dealerships themselves now have special finance departments specifically for subprime borrowers and those with challenged credit.

The most important thing to know before you start looking for a car loan if you have bad credit is that your credit score isn’t permanent. It is something that you can take full control over and fix all by yourself. Paying bills on time and not overextending yourself with credit cards will help improve your credit rating over time, and with proper attention paid to the state of your credit, you can pull yourself out of subprime territory and never look back.

Author Bio: Dee Jurgens is the head copywriter for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://myfreecreditscorenow.net Providing free credit scores for you and yours free credit score Auto Loans from http://www.afterBK.com

Category: Finances
Keywords: car loans,auto loans,car financing,bad credit auto loans,bad credit car loans,automotive financing