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Car Loans With Bad Credit Explained

Car Loans With Bad Credit Explained

Buying a car today is nearly always not a big issue: if you can’t afford to pay the whole lump sum, getting financed from auto loans is the solution.

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In order to qualify for a car loan, you need to submit your credit score to lenders: simply stated, many of them won’t accept your application if you have bad credit,

which is considered a FICO score anywhere below 669.

However, this does not mean that it is impossible to get a car loan with bad credit. Many lenders will allow you higher interest rates than if you were a "prime borrower" with a credit rating ranging from 620 to 850.

When you try to get a car loan with bad credit, there are two main possible scenarios:

1. You are not in a hurry to buy a car: In this case, you can take time for a set of measures aimed at increasing the credit score.

2. You urgently need to buy a car: In this contingency, there are strategies to get financing even with bad credit. Making adequate advance payment is one of them,

How does credit score work for car loans?

The purpose of a credit score is to determine the risk involved in lending you the money you need: the lower the score, the less likely you are to repay the money you borrow, and this is a lender's approach.

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