You don’t have to let bad credit, no credit, a discharged bankruptcy or a past repossession hold you back from getting the car you need.
My name is Devin Dozier, an Automotive Consultant in Martinsburg WV. I have helped many customers get financed regardless of their credit history.
Buying a car can be a positive turning point. It’s one method towards getting back on the road, repairing bad credit and making better financial decisions.
But to get the most out of a car purchase, there are certain details you should know before sinking yourself further into debt.
1) Knowing Your FICO Credit Score –
Before visiting bad credit car dealerships in Martinsburg WV and surrounding areas, it’s good to know exactly where your credit stands.
I first recommend getting a fully detailed FICO credit report. 90% of financial institutions use FICO scores to help determine your credit worthiness.
I know many people, myself included, who track their credit with websites like Credit Karma. Although programs like these may be a great way to keep an eye on changes with your credit, they use a completely different scoring process called Vantage 3.0.
In my experience, the scores my customers received through the Vantage 3.0 process tend to be higher than a true FICO score.
You could only imagine the shock customers have had once they found their FICO credit score was substantially lower than they had originally thought.
Avoid being caught off guard, get a full FICO credit report from myFICO.com. This way you’ll have access to the same information as the car dealerships.
A FICO score of 620 and below is considered “bad” or “poor” credit. People with such scores are prime candidates for second chance financing.
2) Know The Difference Between Buy Here Pay Here & Second Chance Financing –
On your search for guaranteed approval financing, you’re going to encounter both buy here pay here dealerships as well as car dealerships that offer second chance or subprime financing.
What’s The Difference?
Buy here pay here dealerships are for people who have exhausted all other options. It’s commonly the last and final hope for those who need a car now.
Car dealerships offering buy here pay here services give financing in-house. Many requiring you to make payments in person.
One setback to buying a car through a buy here pay here is that most don’t report payments to the credit bureaus. Which is an critical towards rebuilding bad credit.
Another disadvantage is that buy here pay here dealerships can require you to pay the highest interest rate allowed by law.
Second chance financing, sometimes called subprime loans, are offered by institutions who work specifically with people who have shaky credit.
This form of guaranteed financing is preferred over buy here pay here, because it gives the purchaser a chance to rebuild and take control of their credit situation.
You can still expect higher interest rates, but your payment activity will be reported to the 3 credit bureaus.
3) Know What’s
Required for Guaranteed Approval –
To qualify for guaranteed financing through bad credit car dealerships in Martinsburg WV you will need to be at least 18 years in age, present pay-stubs showing you have a steady income source and have lived at your present residence for around 6 months.
The amount of equity you have contributes greatly in getting approved.
Having 20% or more down with trade equity can just about guarantee approval.
The more equity you have to put down, will lower your monthly payment and will save hundreds on interest charges.
A strong co-signer with good credit is another great way to improve your odds of approval. With a cosigner, the lender has two people, rather than one, agreeing to fulfill payment requirements.
4) Know How To Improve Your Credit & Refinance In A Year –
Securing approved financing from a Martinsburg WV car dealership can be the first step towards turning a bad credit situation to the good.
It’s what you do after the approval that can either further damage or greatly Improve your credit rating.
Here’s a few tips to consider to give your credit a huge boost:
1) Make Your Payments On Time –
Making your payments on time will have the greatest impact on your credit. The more you show that you’re responsible with debt, your score will gradually increase over time.
2) Remove Negative Marks On Your Credit –
It may be worth the investment to hire a credit repair company to assist you in removing negative marks on your credit.
A company like CreditFirm will contact those who you owe debts to on your behalf and negotiate a fair payoff agreement or have the debts completely removed from your credit report altogether.
I’ve seen where some customers received a 100+ point credit boost in just 6 months to a year by working with a reputable credit repair company.
3) Refinance To Get Lower Interest Rates and Payments –
The good thing about a car loan is that you can refinance it at anytime.
Being diligent about making on time payments and doing the necessary work to get negative marks removed from your credit report, could help you qualify for a low interest, low payment auto loan.
Think of guaranteed approval and second chance auto financing as a necessary step towards getting on the road to building great credit.
Taking this route will put you in a better position to acquire financing for other important purchases in your life’s journey.