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http://www.carloanskingston.ca/ Check for Mistakes in Your Credit Report Checking your own credit reports can save you a lot of time and hassle.
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6 Important Tips Before You Start
with Bad Credit
1. Check for Mistakes in Your Credit Report
Checking your own credit reports can save you a lot of time and hassle. You can order your credit report from three companies: TransUnion, Equifax, and Experion. Ordering your report from all three will ensure that your information is correct across the board. If there are any mistakes, contact the company directly to have them fixed. Inaccurate information on your credit report could hurt your loan options or stop you getting a vehicle entirely so it is important to check this for yourself before you start. Car dealers and loan providers will not know if information is inaccurate unless you tell them, so it is best to go over this for yourself first.
Do you like paying more money? Of course not! Saving that money for a down payment can significantly affect what interest rate you receive. Having more money to put down will be worth it down the road. You should aim for a down payment of twenty to thirty percent of the car’s value. If this is not possible, save whatever you can, it will all count towards less interest payments and less money out of your pocket. Cash down can also be a deal breaker for getting approved and banks will often make a down payment as a condition of the loan. Stashing a little away under the mattress can only boost your chances of success.
This is probably one of the most important steps. Finding a dealer that can get you the right car you and get you the approval you want, can be kind of tricky. A good portion of dealers do not specialize or spend a lot of time with non-prime buyers and selecting the right dealer is crucial to successfully landing a car. A lot of dealers who do not specialize in car loans will do what is tantamount to a shotgun approach. These dealers shoot off your application to a random smattering of banks crossing their fingers hoping they get lucky. This is not what you want. If you are lucky you will be approved for a loan but with a more specialized approach you would likely have received a better deal with a lower interest rate, a better payment term, or with less conditions. It is important to find a dealer that not only has a large enough inventory to provide you a car that you want but also is specialized in dealing with non-prime buyers.
Finding a dealer who formally specializes in getting customers with bad credit approved is the way to go. Instead of a shotgun approach, it will be more akin to the approach of a sniper. Specialists in this area will be able to look at your information before they send it off to the banks and know which banks you are going to get the best deals. A car loans expert will be very familiar with the banks and will know which banks will give you the best interest rate, payment terms, and conditions. Car loans specialists have contacts at the banks who they regularly do business with. This rapport could make the difference between getting approved and declined.
Once you have given your information to the dealer you have chosen, you will now start the process of getting pre-approved. This involves giving the banks a certain amount of information about yourself and your credit situation. The dealer will submit this information to the banks for you and the banks will make an offer to either accept or decline your loan based on the information you provided. As long as all the information you provided is correct, you will be able to choose between the different offers you receive without having to go through the lengthy process of a formal approval. This is a standard practice when applying for a loan and many car dealerships will even have a website form so you can submit your application online. Using a car loans specialist broker is beneficial here since after submitting one application to them, you will be able to review all your options with little to no work on your end.
Declined? That awful word! Well all is not lost! If you cannot get approved for a loan on your own credit see if you can find a close friend or relative willing to cosign. Having a cosigner, even if the cosigner doesn’t have a perfect credit score, can be a deal breaker. If you know someone who would be comfortable cosigning, call them up and try again. No matter who your cosigner is, if you have one they can only up your chances of success.
If you cannot find a cosigner or if you were declined with your cosigner, another option is finding a dealership that does Buy Here Pay Here or in other words, in-house financing. These dealerships will essentially be willing to finance you out of their own capital with a certain amount of cash down (usually twenty to thirty percent of the vehicle’s purchase price). Since in these situations the dealership is taking more risk, there is usually a higher interest rate on the loan. The average rate will likely be between fifteen and thirty percent but if you exhausted all your other options and you need a car, Buy Here Pay Here can be a viable option. If you were declined by the banks, this type of in-house financing would likely have a competitive rate to the rate you would get if you were approved with a bank anyhow.