Bad Credit Car Loans Near Portsmouth NH

 

Having a bad credit score doesn't have to keep you from buying a new or used vehicle at AutoFair Nissan of Stratham. In fact, people with poor credit get approved for car loans every day. We are willing to work with all people, regardless of their credit score or history, and we make every effort to get approval for all. Before you apply for a bad credit car loan, though, there are some things you should consider.

Initial Steps

The first order of business is to know your credit score. You can get a copy of your credit report through all three national credit report services: Experian, Equifax, and TransUnion. Keep in mind that having a credit score in the "bad" or "poor" range does not mean automatic rejection. There are things you can do to boost your score, if you don't need to apply for a loan immediately. Number one, be sure to pay all of your existing bills on time, pay off as much debt as possible, and thoroughly check to make sure that there are no errors on your credit report. If you find errors, get to work on having them straightened out by contacting the business that has claimed that breach on your credit.

For the next step, you should determine how much money you can afford to spend on a vehicle per month. If you have bad credit, then you must understand that granting you a loan is inherently risky for the lender. Because of that risk, they may charge you very high interest rates that add significantly to your payment. The best strategy is to make a sizable down payment. A large down payment will decrease the amount you need to borrow, lowering your monthly payment while also lowering the risk to your lender.

Getting a Car Loan with Bad Credit

Sometimes, people need a vehicle immediately and don't have time to build up their credit score. If you are one of them, then you still have some options. One of the best ways to improve your chances of getting approved for a car loan is to get a cosigner who has good credit. Typically, a cosigner will be a family member or close friend who trust you and is willing to take a risk for you. The cosigner is there to pay your debt if you are unable to, but they also risk damaging their credit score if you cannot pay. Since there is a cosigner backing you, the lender takes on less risk and can usually offer you a lower interest rate.

Credit unions may also be a viable option for those with less than ideal credit. They are known for offering loans with low interest rates. The catch is that you often have to be a member of the credit union before you can borrow from it. Check to see if there's a credit union associated with your employer or a professional organization you belong to. Credit unions are different from banks, and they have their own restrictions. To know if you meet the specified requirements for a credit union, contact them directly.

After Purchasing a Vehicle

At this point, you have already been approved for an auto loan and purchased a vehicle. Now, there are a couple things that you should keep in mind. First, keep a copy of your car loan contract; it is important to know the exact terms of your loan. Second, you must always pay your car loan on time and never miss a payment. Even a single late or missed payment can be devastating to your credit score and cause you to lose any ground you've gained on it. If you're concerned about always making payments on time, set up automatic payments and be sure that your account balance can always cover them.

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