As adults, we have a whole lot of bills to pay. We sometimes get caught up and forget to pay our bills, which can eventually lead to a poor credit score, which leads to a bad credit rating. If you are planning on getting your own car soon but you are worried about bad credit car finance, then read on, as we have got the answer to your dreaded questions.
To answer your question, yes, getting a car finance even with bad credit rating is possible – you just have to know what you can and cannot do. To keep it simple, we have curated some of the best tips to make the application easier for you.
Request for Your Credit Report
Your credit report shows your standing as a consumer, and whether you have good or bad credit. It is possible for credit reports to have errors, so requesting for a copy and checking it yourself is a very wise idea. Have these errors fixed before getting a car finance, and you will have a higher chance of getting approved.
Look for the Best
You do not have to settle for the first one, unless you are sure that it is the best deal for you. Ask around and make sure to check the rates, so you know which one to apply for.
Pay Your Debts
Before applying for a car finance, make sure that you have paid for your previous debts. This will make it easier for you to pay your car finance, as you would not have any other extra bills to pay. Plus, paying for your previous debts will give your credit report a positive boost, which you surely need when applying for a car finance.
Always Read the Fine Print
Make sure to read the terms and conditions carefully before agreeing or signing a contract. If you have any questions, you can always contact your sales agent. Always remember that the lower the weekly, fortnightly, or monthly payment, the longer it will take for you to be done with the whole payment. Find the plan with the lowest interest rate, but make sure that you can still pay it off regularly to avoid incurring arrears.
Save Up for the Down Payment
The bigger the down payment, the lower the weekly, monthly, or fortnightly payments will be. This will be easier on your pocket, plus missing repayments would not be too much of a problem for you. Try to save at least 10 – 20 percent of the down payment before trying to apply for a car finance.
Get a Co-Borrower
If you have a husband, wife, partner, or someone you can trust sharing the payments with, then go ahead and ask your sales representative if that is possible. If you feel like you cannot handle the responsibility by yourself, then this option is perfect for you. Make sure that you have a good relationship with them though, and that they are willing to take on such a big responsibility, too.
Say No to Unimportant Add-Ons
Sales representatives will definitely ask you to get different add-ons for your new car, but you have to say no to them. This will only add up to your current bill, making it harder for you to pay your dues. However, if you feel like you really need what they are offering you, then go ahead and ask if you can add it to your bill and pay for it weekly, fortnightly, or monthly as well.
Always be honest when applying for a car finance, or any other loan for that matter. The company will be looking through your records, so they will find out about your credit standing anyway. It will be harder for them to trust you once they see any discrepancies between your own statement and your credit report, so it’s always best to be honest all the time.
Take Your Employment Status Into Account
Make sure that you are at least past the probationary period before applying for a car finance. Getting regularized at work and securing your tenureship should be your number one priority, as financiers get a good sense of responsibility from people with a stable job. Avoid jumping from one job to another if you really want to get approved.
Keep these things in mind, and you are sure to go past that approval stage. Remember, bad credit doesn’t always equate to impossible – but it wouldn’t hurt to slowly but surely increase your credit score as well.