Many people assume that if you have a low credit score you can not get financing for a car whether it be a new one or a used one. The fact is, there is available car credit even if you have a terrible score you just have to jump through more hoops in order to get a loan. There are several methods, and while not all may work for your situation, I am sure you can find something to allow you to get a car.
If you have a sub-par credit score, that would be anything below 600, then this means the banks and finance companies will assume you are less likely to pay back a loan. An important thing to consider is why you have the low score in the first place. When a new consumer starts out they have a very low or non-existent score because they have never borrowed any money. If this is the cause of your low score then getting a small loan and making the payments on time, or obtaining a credit card and making the payments will usually give a good credit score bump in a short time. A word of caution about credit cards, if you get one to build credit don’t fall into the trap of running the balance up. You should only hold a very small balance so you can make the payments and that information can be recorded. Be careful of the increase in the credit limit that card issuers use to snag you into a big balance. My daughter got a card with a $500 limit in order to build a credit score. The card company upped her limit to $5000 in a few years so she just continued to let her balance get bigger and bigger. Now she is in the hole for $3500 and it will take her years to pay it off. Be sure you never build a big balance because that is how the credit card companies trap you.
If you have a bad credit score because you actually defaulted on a loan then it will be harder to get another. At this point you may need to have a co-signer on the loan. With this plan you basically piggyback off of the score of your co-signer. The person who makes the loan with you is agreeing that they will make the payments if you don’t. This can be a great way to qualify for a loan but be careful. Many friendships have been ruined and family ties stretched by co-signed loans which were not repaid.
If all else fails you can check on available car credit from a higher priced loan company. These people specialize in making loans for people with bad credit scores. They know some of the loans will go bad so they charge a very high interest rate. Sometimes, you can start out with one of these loans and then transfer to one with a lower rate as you make payments and increase your score.
