Buying a Car with Bad Credit: A Step-By-Step Guide

If you are a person who has a bad credit, leasing or purchasing a car will be some sort of challengeable. Anyway, if you follow some steps to make an improvement of your credit to show that you are further responsible now than before, definitely you’ll get a better chance to purchase a car.

Here I briefly bring you some simple steps which you should follow and through following these steps, you can improve your credit and so you can purchase or lease a car.

1. Manage Your Revenue
First decide how much amount of money that you can pay for monthly as the car rental. Then start to place aside that amount of money monthly. You can use a portion of this money for the purpose of improving your credit balance, while another portion use to the down payment which may occur on purchase of the vehicle. Also pay the full bill amounts of all the other bills on time.

2. Operate Credit Accounts
As the second step, open a store card account and a credit card account if you don’t have one already. Don’t care a lot about the interest rates as you are not going to hold a balance in these accounts. If you already have some charge cards, just pay extra money to make their balances lower. If you obtain new cards, just charge per month from $50 to $100 on each card and pay back the balance as soon as you receive the bill through an email.

3. Save Money
Try your best to save money as much as you can and open a savings account, save the rest of the excess money which you would usually allocate for the payment of the car rental in the account. You have to follow these strategies at least for 6 months to 1 year.

4. Find a Better Car Dealership
After a specific period of time (6 to 12 months), find a trustworthy car dealership company or an individual that deals with the people who have bad credit. You can ask your family and friends for more details or references. Most probably they may know a car dealership merchant who takes much effort to offer the excellent deals for his customers.

5. Accept a Higher Interest Rate
Another important factor which any bad debtor has to expect is to pay a little bit of a higher interest rate than the loans or leases received by the persons with good credit. If your down payment is readily available when you step into the car dealership it may be a great help in the process of negotiation and remember don’t allow them to compel you into a higher monthly payment or a down payment which you cannot afford. If not, you may compel yourself into more and more monetary difficulties even more than before.

6. Prove Your Payback Capability
If you can prove the dealership on your credit statement or credit report with the new accounts which you have been operating since last few months. Credit report is the document which less or more tells the financial institutions all the accurate details regarding your loans, credit cards and any bills you have settled or not at all. So you can bring out that you are able to pay all your bills now and also have a down payment for the purchase of the vehicle.

7. Choose an Affordable Car and Make Payments on Time
Purchase a car that matches your budget. You will have to pay for something else that isn’t fairly what you needed. Complete all your payments on or before the due date in order to not to lose your car or damage your credit any more. However, it is better to keep in mind that by purchasing or leasing this vehicle, you will be able to build up your recognition so that on next time you will purchase the car what you really wanted to purchase.

I hope the guide help you buy a used car with bad credit. If you have any questions or concerns, please leave them on comment below.