It’s not unusual to have a poor credit rating, and for those who do, it can be a struggle to find companies that trust them when it comes to lending money. It can prove difficult to take out loans and get help with any finances if you are looking at companies that rely on credit scores. Many companies that provide car loan services want proof of a stable credit score.
It isn’t easy to quickly improve your credit score and it takes a lot of time to boost up your score if you don’t have enough money coming in. For those in need of a new car but can’t afford to buy one outright, the only option is a car loan company that doesn’t require a high credit score to qualify. Here is our guide to securing a car loan if you have a poor credit score…
Find a lenient car loan company that doesn’t require a high credit score
Lots of people need a car to drive to work or to take their children to school, and for these reasons a car can be classed as an essential. If you have savings but a low credit rating, some car loan companies only require a 10% deposit. Go for a company that offers bad credit car loans to secure a deal, even though your credit rating is low. Luckily, some companies are flexible and they trust you to pay back loans in manageable monthly instalments. Just make sure you can afford the instalments on a monthly basis before signing up and driving away with the car.
Borrow the money for a deposit from friends or family for the time being
Generous friends or family could be your key to securing a new car. If you have a low credit rating, ask them to lend you some money so you can pay off a big chunk upfront. Some companies might not mind a low credit rating if you can pay a large deposit. If you do end up paying a large amount of money upfront, make sure you are certain about the car you have chosen and take it for a spin before investing. Most car garages and lenders will let you have a test drive before you sign any of the paperwork.
Prove you are reliable and responsible to loan companies
If you do end up getting a car on finance, the main thing you will need to ensure is on time payments. Most car loan companies require you to pay off your new car in monthly instalments that cannot be missed. Luckily, payments will be a set amount and you can just set them up as a standing order with your bank account. Set monthly amounts are the best way to pay off any type of loan as you will know what to pay month to month.
Try your best to improve your credit score
There are websites online like Experian that enable you to check your credit rating for free. You might need to sign up and create an account, but it’s worth it to find out why your credit score is at the current number, is it. If you have any debt or unpaid bills, they will show up on your account. This will help you find areas you need to improve on as soon as possible. You should still work on improving your credit score, even if you have managed to get a car loan without one, as you might need it for other finance in future.
After reading our guide to securing a car loan with a poor credit rating, we hope you manage to find a suitable car for yourself. There are always ways to improve your credit score and sometimes it’s just a matter of time. Research the best companies for car loans and finance options to get you on the road in your new ride as soon as possible.