What to know before buying a car with bad credit

Bad Credit Doesn’t mean you deserve to be taken advantage of!

Getting a car loan with bad credit is not impossible but requires a little more research to make sure you get the best deal possible. On this site you will learn what you need to know in order to get the best car loan rates with bad credit.

The 3 levels of car loans - where do you stand

EXCELLENT CREDIT

Excellent credit is typically 750 and above credit score. You have no collection accounts, no late payments, and at least one satisfied car loan. When a car advertisement says "offer available to well qualified buyers" this is what they mean. 80% of Americans do not fall into this category so often car companies will offer these seemingly amazing deals to get you in the store knowing that they will only be obligated to extend the deal to a small fraction of customers. 

PRIME CREDIT

Prime credit is typically 640 and above credit score. You have no collection accounts, no late payments, and at least one satisfied car loan. A 640 score alone does not necessarily mean you are guaranteed to qualify for prime credit. Other factors such as length of credit history, time on job, debt to income ratio also play a part.

SUB-PRIME CREDIT 

 Sub-prime credit is typically 550-640 credit score. With subprime credit you typically can get away with a late payment or two or a collection account. In some cases even a car repossession is acceptable. A rule of thumb with sub-prime credit is the worse off it is the more you should be prepared to put down. More down payment means less risk for the lender and a better equity situation for them so they are more likely to over look flaws in your credit. 

BUY HERE PAY HERE CAR LOTS

When all else fails your last resort is a buy here pay here car lot. Most buy here pay here dealerships will accept almost any credit situation as long as you have a stable job and can afford the payments. Multiple repossessions, collection accounts, late payments, charge offs are all acceptable.