Car Financing With Bad Credit

Less than perfect credit? A new auto loan might still be available to you in the form of bad credit new car financing. Before you seek any kind of auto loan you need to look at your own financial situation and determine just what sort of payment schedule you can handle.

Your Credit Report

First, take a look at your own credit report. You can get a free credit report each year from each of the three major credit reporting agencies, Experian, TransUnion and Equifax. Analyze every detail of your credit report and carefully review any outstanding reports for mistakes. Be ready to provide documentation in writing to have errors corrected.

Decrease Your Debt

Decreasing your debts and paying your bills on time every month are the fastest way to steadily increase your credit score. Make regular monthly payments on all credit cards but do not close your accounts. Lenders want to see a long history of repayments in addition to a low debt load.


Lenders love to lend money so they make an assortment of options available to borrowers with varying degrees of credit. A signature loan, base solely on your current credit rating is the easiest and fastest way to get a loan. After that, some lenders will offer a second mortgage against your home, or a second lien against your new vehicle, if there is available equity. You might even find a lender willing to provide you with a debt consolidation loan to help you consolidate your existing debt into one manageable payment. This consolidated loan can then be offered to a third party lender, freeing up the new lender to loan you the money you need to buy your new vehicle.

There are an abundance of ways for you to finance that new vehicle purchase regardless of your credit rating. You need to be careful not to assume too much debt, or chose an option which will not help you in the long run, but your lender is ultimately the one who will decide how much you can have and at what rate.

Just do your homework before you sign anything.