Bad Credit Car Loan
At Balise Toyota of Springfield, our goal is to help our customers leave with a new or used vehicle, even if they’re saddled with poor credit. Although at times living with bad credit can seem like the end of the world, most of our buyers in that category are able to get behind the wheel of a new vehicle by working with our financing team and specialized lenders that we’ve developed relationships with. If you need a vehicle but have been turned down for a loan and don’t know where to turn, read on. This page will answer some frequently asked questions (FAQs) people have about buying a car with imperfect credit.
What is considered poor credit?
A FICO credit score is a 3-digit value ranging from 300 to 850 that provides a fair and universal way to gauge whether or not a person is a responsible borrower. If your score is in the range of 300 to 579, it’s considered to be “poor.”
Can I purchase a car with poor credit?
Yes, but you’ll have the best results with professional guidance and perhaps a special type of loan. If you don’t need a car immediately, work on improving your credit score before you start applying for loans. This will give you a greater chance of not just getting approved but also locking in a reasonable interest rate. The first step is to pay off as much debt as you can, since that will reduce your debt ratio and cause your credit score to tick upward. Don’t open any new credit unless you absolutely need it (you need a car, but you don’t need another credit card, for example).
How can I see my credit report?
There are three main credit reporting companies that generate credit reports: Equifax, Experian, and TransUnion. With each of these, you are entitled to a free report every 12 months.
What can I do if I see an inaccuracy in my credit report?
Dispute it by either calling the creditor, writing them a letter (be sure to follow up with a phone call), or using the online dispute center provided by the credit bureau. If there’s a discrepancy, it can hurt your score, so be sure to keep track of all three reports.
What does it mean to default on a loan?
When a borrower defaults, this simply means they’ve failed to pay back their debt as required by the loan agreement. Defaulting on a loan can be devastating to your credit score.
What happens if I miss a payment?
Even if you miss a single payment, your credit score will start to dip. If you make payments on time, though, the opposite is true: consistent payments will raise your score and show any future potential lender that you’re capable of paying them back.