Bad Credit

Tips for Buyers with Bad Credit

If you have a bad credit score, purchasing or leasing a vehicle from dealerships (or through any lender) can be stressful, especially if it’s your first time. We’ve found that some of our customers haven’t worked to improve their credit before, which is why we’ve created a list of tips that may be handy when shopping for your next vehicle. Keep reading to glean some helpful tips on the financial side of car buying:

 

Check Your Credit Score Beforehand

While it may be uncomfortable, it’s always better to know the details of your financial situation before applying for credit. Your credit score and history are vital pieces of information that lenders and dealers will use to determine your creditworthiness, so if they’re checking your information, you should know it, too. Generally, scores above 700 are considered good for auto loans and they can qualify you for lower interest rates. Your score factors variables such as how long you’ve had your financial accounts, the number of accounts and the consistency and percentage of minimum payments made.

Improve Score + Fix Credit Errors

If your score is below 700, consider improving it before applying for a loan. While our finance center has worked with a variety of credit histories and scores before, it may be better for you in the long run to bump your score up before committing to a large loan. Plus, interest rates for bad credit are higher. It’s a good idea to check for errors in your credit report since those can reduce your score — you may see a significant increase when all is made right again.

Make a Budget + Get Pre-Approved

Figure out how much you’re willing to spend on a new or used vehicle. Your decision will be based on your needs (larger vehicles are more expensive), your bank account (how much of a down payment you can swing) and how long you plan on making payments. Once you’ve made a budget that includes car insurance and an estimate on annual repairs and maintenance, get pre-qualified with our online finance application.

Here’s the Plan: Big Down Payment + Shorter Term

If you’ve been pre-approved, congratulations! You’re one step closer to owning the car of your dreams! After your test drive, you’ll talk with one of our financial experts about your options for financing. We recommend placing as much down as possible and agreeing on a loan term that’s no longer than 60 months. But again, depending on your credit situation, those numbers will change person by person, but you should always plan on paying off your auto loan early if possible. Your credit score will thank you.

But What If I Got Denied?

Don’t worry. While it can be stressful, there are options available if you’ve been denied a car loan. Consider asking someone you trust to be a co-signer, or tackle the debt you already have first to improve your score. Remember, it requires diligence and patience when it comes to finances, so don’t be discouraged if it takes months or even a year or two to see the number you want. And, our experts are always just a phone call away if you’d like to discuss your options in greater detail.

At Cooper Motor Company, we work with customers from a variety of financial situations. If you're worried about what kind of vehicle you can afford, come visit us at our dealership located at 305 E Main St., Clinton, SC 29325. We proudly serve customers from Laurens, Newberry, Greenwood and Fountain Inn.