Is your credit score lower than you'd like it to be? Well, that doesn't mean you can't get approved to buy a new or used vehicle at AutoFair Nissan of Stratham. People with less-than-perfect credit get approved for car loans every day. We understand the need for a reliable vehicle, and we make every effort to get approval for all credit applicants. Before you apply for a bad credit car loan, though, it's best to have a little knowledge on the subject. Below, you'll find some questions we frequently answer for interested vehicle buyers with credit issues.

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What do I need to do before I apply for a bad credit car loan?

The first order of business is to know what your FICO credit score is and where that number ranks on the scale. You can get a copy of your credit report through any of three national credit report services - Experian, Equifax, or TransUnion - and you're entitled to one copy from each per year. The range of credit scores goes from 300 to 850, with anything under 600 generally considered poor. That said, the cutoff points for those general ratings (very good, good, fair, and poor) vary among lenders. We have built relationships with a number of lenders, including some who are flexible about helping people with credit challenges.

You should also look closely and critically at your budget to determine what you can afford to pay for a car each month for the duration of your loan, making sure to leave enough breathing room for unexpected expenses. Be honest with yourself about which vehicle you can afford and what options you really need right now. Keep in mind that you can always upgrade in a couple of years if you work hard to improve your overall financial situation.

 

Who's going to lend to somebody with a poor credit score?

Having a credit score in the "poor" range does not mean automatic rejection: there are specialized loan programs for credit-challenged buyers. If your score is in the fair to poor range, you can still get approved for a specialized product called a subprime loan (this will carry a higher interest rate). Once you're in your new car, you work toward raising your credit score by paying all of your bills on time, paying down other debts, and even putting a little more money toward the loan principal when you can. Then, when you've brought your credit score up, you can apply to refinance your loan with a lower interest rate.

 

Will I need a cosigner?

While having a cosigner will improve your chances of getting approved for a vehicle loan, it's not essential - nor is it as easy as it may sound. Even if you have a relative or good friend with a very good credit score, they may not be willing to cosign because it presents them with a financial risk. Cosigning legally binds that person to take on your debt if you stop paying for any reason. Since their credit reputation will be put on the line, you should understand if you can't find a willing cosigner.


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