Your credit score is one of the factors that will determine whether you will get approved for a car loan. Even if you have a stable job and income, it can still be difficult for you to get approved for a loan if your credit is bad. However, buying a car with bad credit is still possible. There are several things that you will need to do.
Check Your Credit
You are allowed to get one free credit check per year. It is a good idea to look at your credit report because you may have an error on it. An error can cause your credit score to go down. Make sure that you dispute errors. If you do not need to buy a car right now, then you should spend some time working on your credit.
Save up for a Down Payment
Buying a car with bad credit is a lot easier if you are able to make a big down payment. A big down payment will not only increase your chances of getting approved, but it can also help you save on monthly car payments. It is a good idea to make a down payment of 20% or more.
Get Pre-Approved
It will be easier for you to shop around for a car loan if you get pre-approved. You should talk to your credit union or bank about getting pre-approved. You will have to submit an application in order to get pre-approved.
Opt for a Shorter Loan Period
You will have higher monthly payments if you have a shorter loan period. However, you will end up saving money over time because you will have a lower interest rate. If you pay off your car loan more quickly, then you will also be able to boost your credit score.
For more information, visit Canada Auto Experts.
