Chances are, if you are reading this you are in the market to buy a car with low credit score but are worried your credit will prevent you from finding an affordable loan. We understand the anxiety this situation can cause, especially if you are in dire need of a car.
We are going to give you the tips you need to buy a car with low credit score and keep your stress levels low when you do it!
Looking at the big picture
The initial step is looking at your credit report and getting an assessment of things. You may be pleasantly surprised to know that your credit score is not as low as your feared but whatever your score is, you can start making progress. Credit Karma is a popular app that any consumer can use to look at their credit score for free.
Taking corrective action
Start by making a budget and ensuring that you can at least pay the minimum amount on every credit account you have. Most of us were not taught budgeting in school, but some tutorials can help you write up a simple budget.
When your budget has been established, the next step is to find out whether you can negotiate down the interest rates that you are being charged on these accounts.
Reach out to your creditors and ask them if they would be willing to reduce the interest rates they are charging. While this step may make you feel uncomfortable, you are doing this to help improve your finances so you can buy a new car.
Taking on a side hustle
Unemployment rates in Canada are quite low, so you should consider taking on a second job to boost your income. This added income will help you qualify for a larger car loan while at the same time you can pay down your debts faster.
While not everyone can work more than one job, you should give it a try.
Asking family and close friends for help
If the need to buy a new car is truly dire, you could reach out to your family and close friends to find out if they would co-sign a loan for you. Co-signing a car loan is a serious financial commitment, so do not take it too hard if people are not willing or able to co-sign.
Getting help from a great car dealership
There are car dealerships that do specialize in helping people buy a car with low credit score. We have already covered all of the steps you need to take to boost your credit score.
The dealership will have access to specialized lenders that are willing and able to work with a customer like you. You will need to prepare yourself for the interest rates that are going to be quoted.
These lenders are not trying to take advantage of you, they need to raise capital from investors to fund the loan. The lenders will be taking a greater risk lending to you than someone with great credit so they need to mitigate that risk by charging a higher interest rate.
Just keep in mind you will be able to refinance the car loan after a year to 18 months of paying your bills on time. By having a plan you will be able to get the car you need and a new lease on your financial life.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!