How to buy a car with bad credit
1. in buying a car with bad credit, income becomes a major determining factor. Dropping down to a lower price vehicle might be necessary to get financing approved. to better your chance of qialifying for a car loan, look for a car with monthly payments under 16% of your monthly income.
2. in approving car loans, lending institutions use computer scoring system and give numerical grades based on type or length of employment, length of residence whether you rent or own, if you have checking and savings accounts, etc. The scoring system even give plus points for complete phone numbers and addresses for family members and friends you list as references.
3. Be ready with a larger than usual amount for down payment. a large down payment reduces financial risks and covers some of the cost a dealer might incur.
4. Ask family or friends who have more solid credit history to co-sign for you. After a good number of timely payments, the loan can be refinanced under your name only and the co signer can be released from financial responsibility.
5. Many finance companies specialize in signature loans and some offer even to people with bad credit. This type of loan, alternatively called “personal loans” can be used for whatever purpose and certainly can be directed towards the purchase of a car.