Bad Credit Car Loans 102

Bad credit car loans are still possible. Being deemed subprime doesn't necessarily mean that your borrowing days are over because lenders are getting stricter.

You just need a lender that specializes in bad credit car loans.

Being pre-approved means that you can confidently walk into the dealership knowing that you are in control of the financing not the dealer. You will know what price range you are approved for ahead of time and can shop within that and negotiate for the best deal.

The dealer will try their best to move you into a higher priced car and handle the financing for you – beware! That’s in their best interest, not yours.

So how do you know if you are in the “bad credit” category or not? First you need to understand the term that defines you, subprime.

Each lender has its own definition of what constitutes a subprime borrower, therefore placing you squarely in the "bad credit car loan" category. But typically, a credit score of less than 620 lands you in this category.

We encourage you to not assume your credit is bad, but to pull your credit and see for yourself.

There are plenty of lenders specializing in bad credit loans who are eager and willing to lend to you.

Here are a few tips:

Check Your Credit Report

If you've got bad credit, it's helpful to know it beforehand. It can make a major difference in interest rate, and in which lender to select for car loans.

Make sure that everything on your report is accurate; it could be that information has been entered in error and that your credit history is a lot better than you think it is.

For a FREE copy of your credit report click here.

Don't Rely On The Dealer

Dealers take a cut of all car-financing deals they land. And they get MORE if they can bump the interest up 1 or 2 percent higher without you knowing it. They especially like to do this with bad credit car loans.

Get pre-approved (not the same as pre-qualified) for your loan before setting foot inside the dealership.

Remember That Your Credit Score Is Ever Changing

When it comes to your credit history, the ball is entirely in your court. You can improve your bad credit by paying your bills on time and not overextending yourself when it comes to loans and credit cards. If you have items that are out-dated or incorrect on your credit report these can be removed legally .

For a complete list of our recommended bad credit car loan lenders click here.