How to buy a car with bad credit part 3
This is part 3 of a many part resource on buying a used car with bad credit. Make sure that you have already read part 1 and 2 of How to buy a car with bad credit. This hub continues to explore credit scoring.
Another important factor is the date that the credit score was last compiled. Many people focus mostly on their score and not the date. There is a record of which lenders you have paid in full and which you haven’t. If the report is out of date, then it might be that you have fully paid one or more of those lenders, and if you have and the report doesn’t reflect that then you will have to correct it. If there is any kind of discrepancy then it will probably count against you. Get it corrected as soon as you can, and that should help you to improve your credit score.
So which is better, going to a bank or getting credit directly from the car dealer? Honestly, getting a loan from a bank is a lot better than opting to get a loan from the local car dealer. The banks focus on your overall credit scores and check to see your full credit history. They then sensibly decide if you will be able to make those payments or not. And it keeps you safe. Banks such as AmeriCredit, Capital One and the Household Finance are considered to be the best subprime lenders in the market.
If on the other hand you go to a car dealership then you run the risk of being manipulated by the dealer into over reaching yourself. Now please, if you are a car dealer who does not act like this don’t take offence. But I am sure that you will realise that there are some unscrupulous people out there who are only too happy to take your money off you, and couldn’t give a hoot what your personal money situation is. I have even known dealers who will say that you don’t need to worry, because if they change such and such a box then you will be accepted. Things are changing, but not fast enough.
And I know people can be like that. I was, once, many years ago.
Lets think through what could happen.
Imagine that you are approved for a loan from the bank. It means you can walk in, check the cars that you like, and see what deal you can strike with the dealer because you already have the money to buy it. You are fully aware if the car is within your reach or not.
On the other hand, if you are going to the dealer and talk about all the money lending and terms and conditions, then they are going to tighten up the noose around your neck by letting you know how much they are doing for you and then dropping you into an interest payment loan that is going to just get you into more trouble.
Therefore, the best option is to go to the bank in the first place and talk things over with them. Yes, they might not give you the money you want, but at least you will know what you can afford.
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