Bad Credit Car Loans

Here at AutoFair Ford of Manchester, our priority is to help all of our customers get into the vehicle they need, regardless of their credit score. Even if you have no credit history at all, we'll be happy to work with you and find a solution for your financial situation. Now, how does somebody with past or present credit challenges actually get approved a car loan?


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Initial Steps

First, you need to find out what your current credit score is. There are three national credit report services (Experian, Equifax, and TransUnion) where you can obtain this information, and you're entitled to one free copy of your credit report every calendar year. There are also websites that will show you your credit score at no cost.

Credit scores range from as low as 280 or 300 (depending on the source) to a maximum of 850, with scores below 630 generally considered poor and scores above 800 considered exceptional. If your score falls in to fair or poor territory, there are things you can do to increase it: pay off as much debt as possible, always pay your bills on time, and clear your credit report of possible errors. You should also resist opening any new credit accounts that you don't absolutely need and save any potential credit for what you must have: a vehicle.

Next, look closely at your finances and decide how much you can afford each month for a car. Then, determine how much you can put down. The larger your down payment, the less you'll need to borrow - and having to borrow less will open up more lending doors for you (and make your monthly payments lower). If your available funds for a down payment seem low, figure out if you can put off your car purchase a few more weeks so you can save more money.


Getting a Car Loan with Bad Credit

If you don't have time to improve your credit score before purchasing a vehicle, there are still options that can help you get a loan approval. You may have a friend or relative with a good credit score who's willing to cosign for you. A cosigner agrees to pay the lender if you're unable to, ultimately reducing the risk for the lender. On the other side, if you do not pay your loan on time, it can negatively impact the cosigner's credit score.

Our experienced Financing Team at AutoFair Ford in Manchester has built excellent relationships with lenders over the years, and they will do everything possible to find you a solution, even without a cosigner. There are special situations for people with credit issues, and chances are you'll qualify for a subprime loan if you have been turned down for conventional loans. A subprime loan will carry higher interest rates than a standard loan, but the primary goal is to secure financing for your vehicle. Once you do that, you can work to pay the loan off early, which will reduce the amount of time that you'll have to pay that higher interest. You can also look to refinance the loan into better terms (a lower APR) after you've been paying on time for a while and your credit score has improved.

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