Many consumers who are in need of a car loan may think that they will not qualify because of bad credit. True, having good credit will be advantageous for people who are in need of financing. If you can wait until your credit improves, then you will be in a much better position to apply.

Nevertheless, there are lenders that offer special financing programs to customers with bad credit. So if you really need to purchase a car through the help of a lender, you should be prepared to negotiate correctly. Remember, even if you have imperfect credit, you still deserve to be treated fairly.

In this article, we present practical tips for consumers who want to acquire a bad credit car loan:

Check your credit report. Get a copy of your personal credit report from each of the three major credit bureaus (Experian, Equifax, TransUnion). Examine your report and see to it that it does not contain any error or misinformation which could be hurting your credit score.

In case correction is needed, send a letter of request to the bureau that issued your report immediately. Correcting errors can help you increase your credit score instantly. Remember, your final rating is a big factor which determines the interest rate you will be offered.

Consider your qualifications. Bad credit auto loan lenders do extend financing especially to consumers with bad credit. But you must meet other qualifications. For example, do you have a stable employment? Do you meet the minimum salary bracket?

Needless to say, lenders are looking for some assurance that the borrower will be able to keep up with the loan payments. If your car loan application gets declined, your credit score can drop even more. To avoid inflicting more damage to your credit rating, check the lender’s requirements first and see to it that you will qualify.

Reduce credit-to-debt ratio. When a potential lender checks your personal credit report, too many unpaid charges and over-the-limit accounts may cause a lender to doubt your capability to handle debt and repayment. Thus, it’s better to minimize the use of your credit lines and pay off your charges a few months before applying for a car loan.

Compare loan rates. Many auto loan lenders offer free quotations which you can get online. You can also use online comparison tools from car loan brokers to compare rates and prices from different lenders.

Keep in mind that the quote you will get is not the exact deal, but only an estimate. Your rate and monthly loan fee can still increase or decrease after your lender reviews your car loan application or after you have met with a potential lender to negotiate.

Request for a lower rate. Some consumers may be afraid to negotiate because they have bad credit. But it is still always worth the effort to try and request for a better deal. Let your lender know that steps you’ve already done to improve your personal credit.

When you negotiate, you may find that there are lenders who will consider your request especially if the circumstances that led to your bad credit history are beyond your control.