Bad Credit Auto Loan

Why car buyers with bad credit get raked over the coals
It alls boils down to ignorance, lack of information, high debt load, and low credit score. You don't notice the veil being pulled over your head, you don't see how you are descending into the burning depths of bad debt and despair, not realizing you lose $4000 to $6000 every time you trade in a car, all you know is you are getting out from one bad upside down car loan and into another car loan with lower payments, but 72 or 84 months on the loan. Your problem is you are focusing on the monthly payment instead of the selling price of the car, and the items that make up your monthly payment, and how you can reduce your monthly payment. The reason you lose out every time is you don't have the same information the car dealers have about your own credit history. That is why we here at CarBuyingTips.com, will educate you so this won't happen to you.

If you fail to prepare, then prepare to fail
The biggest new car financing mistake buyers make is trying to buy a new car without checking online auto loan rates or knowing if their credit history can support that action. The bottom line is you better know BEFORE you visit any car dealer what APR car loan interest rate you should be paying, and you better know the current state of your credit history, good credit or bad credit. If it's bad, you better fix it before buying a new car. A big source of emails we get are from people with auto financing issues, whose new car loans fell through at the dealer. If you have bad credit, you'll never ever get 0% financing auto loans from those 0% APR ads. Read the fine print, you usually need stellar a credit score over 720. Applying for new car financing without knowing your credit score is the dumbest thing a new car buyer can do. Use our car loan payment calculator tools to play on even ground with car dealers and verify their numbers to make sure they are not payment packing your auto loan.

Help finding bad credit auto loans If your Credit Score is < 600 or you don't have a past history of auto loans, don't submit loan applications that get rejected, dropping your credit score even further. Apply to Auto Credit Express, they work with multiple lenders. They may be able to get you new car financing from one of their high risk lenders, with decent online auto loan rates, even with a bankruptcy. If your score is > 550, $1,500 or more in monthly income, full time employment, Auto Credit Express should be able to help you. myAutoloan.com is another site that my be able to help you. If you had bad credit in the past, but now you make more money, you'll find you are cash rich, and credit poor. Then a bad credit auto loan might be your only hope.

Avoid financing extended warranties and extras into high APR loans
Many people with bad credit make this mistake. If you know you are paying 18% APR, then forget about adding items like Warranties and Window VIN# Etch, and insurance into your loan, why pay 18% on those too? That just digs you a deeper hole. You can buy them after the fact direct without middleman car dealer markups, and no 18% APR.

How to get bad credit auto loans

First of all, I'll give you my advice if you have bad credit: don't buy a new car right now. Wait a little while and repair your credit yourself using our credit repair tips on our other site DebtWizards.com and avoid credit doctor scams. You can improve your credit score tremendously and quickly the first month using our strategies. Then buy your car later once your debt balances are lower and your credit score is above 600, and you have 20% to put down. The reason you need 20% down payment is cars typically depreciate about 20% the first year, and if you put down 0%, you'll be 20% upside down after the first year. You never want to be upside down on a car loan. That is why you are in trouble in the first place, you bought the car you have now with no money down, trading in another car that you were upside down on to lower your payments, only your payments really did not get lower.

Get Your Credit Report & Credit Score Online
You can run your own credit report as often as you like without affecting your credit score. But don't keep applying for credit, as that WILL lower your credit score. It's crucial for you to get your credit score so the dealer cannot lie to you. If they lie and claim your credit score is 550 when you know it's 650, you can pull your real credit score out of your folder and make them eat their words. Forget about the free annual credit reports, because what you really need is the credit report with the credit score option, which you have to pay for. No web site gives your credit score for free. You need to get the 3 credit bureau report with the 3 credit score option, because that is what the lenders are looking at.

CONSUMER ALERT: In August 2008 11 people were charged with stealing 41 million credit card numbers by hacking into networks at nine major retailers. Incidents like this continue to happen all the time and emphasize why it is so important to monitor your credit file and protect yourself from identity theft. Where To Get Your Credit Report On The Internet: Experian Online Credit Report Equifax is one of the big 3 credit bureaus in the U.S. Most creditors who run your credit profile use Equifax, as they are the most thorough. You need the credit score option so you'll know BEFORE going to the dealer. No more dealers lying that you have a bad score, you'll have your FICO Beacon score to slam the door shut on their scam. When you apply for mortgages and car loans, banks get your credit report from Equifax. Using the same credit bureau as banks, you'll be in sync with what they see. The Score Power package includes your Equifax Credit Profile, your FICO score (also known as your BEACON score), plus a personalized analysis with tips on how to improve your score over time, how you rank among other consumers. Equifax Online Credit Reports You get a thorough credit report in 30 seconds from one of the big 3 credit bureaus. They are strict about security so if you type one bit of data incorrectly or have moved in recently, you won't be able to get your report instantly. Instead they'll mail it to you about a week later. If you have never seen your report before, you should get the "Merged Credit Report" from All 3 credit bureaus. Experian also offers Triple Advantage, the complete credit monitoring solution. This package includes unlimited credit scores and monitoring from all three credit bureaus. Banks and dealers typically run your credit report from at least 2 credit bureaus. TrueCredit has your credit report online instantly. Get the 3-in-1 Credit Report With FREE Credit Score if you have never seen your credit report. It has your credit files from the top 3 credit bureaus used by car dealers. Now you'll have the story on what car dealers know.

What Should My Credit Score Be For Approval On A New Car Loan? Who should I apply to?

• If your credit score is > 680 (prime borrower), you'll likely get the lowest APR car loans at discount online lenders Up2Drive!
• If your credit score is < 680, you are "sub prime". You'll pay higher APR on your auto loan, try applying to Auto Credit Express, myAutoloan.com or CarsDirect Car Loans
• Below 550, you can forget about a car loan, or even a bad credit auto loan through any lender or car dealer. No one will touch you, blood from a stone...

Use caution when trading in a car that you still owe money on
We hear from our readers all the time who traded in a car they owed money on and a couple of months later were shocked to hear the dealer did not pay off their car loan in ten days as promised. With this scam, when the bank calls, YOU are responsible because the old car loan is in your name, and the dealer didn't pay it off. If you trade in your car that you owe money on, make the dealer put in writing that they'll pay off your car loan in ten days, or no deal.

Why did the dealer call you two weeks later to re-sign your car loan?
The "Subject to Financing" clause appears on paperwork of all new car loans. You think you are signing a contract but the deal isn't done yet. A couple of weeks later the dealer calls and tells you that "your new car loan fell through." This is a common auto loan scam, usually pulled on people with bad credit. Especially if you have bad credit, you should get financing set up before you buy a new car. You'll find the dealer will call and say they found you a lower APR. All you have to do is come back in and re-sign the paperwork! BEWARE! Have them fax you over all the new figures and APR in writing. Pay close attention and make sure they did not add months to the loan or anything. If anything but the APR changed do not re-sign the contracts. This is why we are big proponents of setting up your new car loan before shopping whenever possible.

Tips to increase your chances of car loan approval

• You should have greater than $1600 monthly income
• Pay down your credit card balances as low as possible
• Pay higher APR cards first before applying for auto loans
• A previous new car loan or mortgage on your credit report can help
• Get stable employment
• You shouldn't apply for a bad credit car loan if you haven't been at the same job 6 months

Steps to take before you apply for a bad credit car loan:

• Get your Credit Score so dealers can't lie to you about your score.
• If you have old unused credit accounts, close them. They drag down your credit score.
• Remove erroneous previous addresses and other errors off your credit report

Watch out for the Straw Purchase car loan, when you have a co-signer!
With car buying, a straw purchase is when the dealer tells you that with your bad credit, you can't qualify for the auto loan so you need a co-signer. OK, Mom will do it for you. But Mom is duped by the dealer and a few weeks later you find out there is no co-signed auto loan, the auto loan in Mom's name! This will not help restore your bad credit. Her name is on the title. How To Avoid The Scam: Have both signers at the dealership so both signatures will be done together. With a bad credit car loan from Auto Credit Express you will usually not need a cosigner.

Don't Just Borrow Your Way Out of Debt!
Consolidation loans are DANGEROUS, because you shift all your debt from one place to another, OPENING A NEW CHANNEL OF CREDIT, while freeing up your credit cards. Some people proceed to fill up their credit cards again, now they have double the debt they started with, paying up to 22% on their consolidation loan because they weren't paying attention to the APR. Some unscrupulous consolidation companies make it appear they are eliminating your debt, or hide the APR. It's better to transfer you credit card balances to your lowest APR card. Pay more to cards with high APR, send more than the minimum payment, or it will take 10 years to pay it off. If you have cash in the bank earning 2%, it's losing you more to income taxes, so be smart and use it to pay off 18% debt. A home equity loan can pay off credit cards, and write off the interest on your taxes. But you MUST close those cards, or risk running them back up. We cover all this in much more clear detail on our other site DebtWizards.com

Go On to Chapter 2: Discount Car Buying & Car Pricing On The Internet

Jump to any chapter. I suggest you read each chapter in order.
Chapter 1 Get your credit report, how to get a car loan, scams, online car loans,first time car loans, budget & loan excel spreadsheets, credit repair.	Chapter 2 Reviews of internet discount car buying sites, new car prices, find dealer's invoice cost. Get a new car quote.	Chapter 3 What to bring to a dealership, what to say, how to act, what not to do, what to look for at the dealership, and a glossary of all dealer fees.	Chapter 4 How to read dealer invoices, finding dealer's cost, how much to offer the dealer, buyers offer spreadsheet, examples, trade-ins.
Chapter 5 Negotiating tips, dealer scams & tricks to watch out for, dealing with aggressive salespeople, choosing between rebates or low APR loans.	Chapter 6 Close the deal, avoid needless extras, scams in the business office, extended warranty scams, options, buying warranties online.	Chapter 7 Actual misleading dealer ads, and what to do when you've been ripped off, customer satisfaction surveys, how I bought my Lexus.

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