When you have less than perfect credit or a credit history that isn't well established, getting approved for vehicle financing can sometimes be a challenge. Fortunately, there are some steps you can take to not only improve your chances of being approved but to increase your chances of being approved for a car loan with a reasonable interest rate and fair loan terms.
Pull Your Credit Report
Before applying for any type of loan, it's always a good idea to pull a recent copy of your credit report. You can do this for free once a year by contacting any of the three reporting bureaus (Transunion, Equifax, or Experian). There are also plenty of reputable websites, such as Credit Karma, that allow you to check your credit score for free as often as you want. Reviewing your credit report is a great way to know where you stand and dispute any possible errors on your report before applying for vehicle financing.
Consider a Co-Signer
If you're worried about a lack of credit history or a low credit score preventing you from being approved, you might look into having a co-signer added to your loan application. This person would share legal responsibility for your loan, and in exchange, you may have an easier time getting approved if his or her credit score is decent.
Make a Larger Down Payment
If you have the cash, you may also be able to get approved for a car loan more easily if you pony up more money for a larger down payment. This, in turn, reduces the total amount that you need to have financed, which can make it easier to get approved. At the same time, a larger down payment means you'll pay less in interest over the repayment term of your loan, so you'll save money in the long-run.
Explore In-House Financing
Many dealerships these days offer in-house financing specifically designed for people with poor credit or a lack of credit history. Inquire with your dealership to see what kinds of loan options they offer and what the qualifications are; there's a good chance you can get approved for one of these loans, even without a co-signer. Some may not even require a credit check.
Getting approved for a car loan with less than ideal credit can be challenging, but there are plenty of options available that can help make it happen. Contact a company like Bay Ridge Nissan for more information and assistance.