How to Get an Auto Loan With Poor Credit

Many car purchases are funded using financing provided by the dealership, a captive financing company or a bank. A captive financing company is a separate financing company owned by the dealership or the dealership's parent company. Bad credit may prevent you from getting an auto loan in a large enough amount to afford the car you want, or the interest rate may be too prohibitive. Certain dealerships, credit unions and other financial institutions have options for borrowers with bad credit to get transportation.

Instructions

1

Pay down credit card and store card balances a month to two months before going car shopping if possible. Paying down your revolving debt balance is a fast way to raise your credit score if you are have a high percentage of credit card debt compared to your credit card limits. This credit score boost may be enough to get you a lower interest rate.

2

Check car lots and dealerships that market financing with no credit check or that offer financing to those with bad credit or no credit. Many are buy-here, pay-here dealerships that arrange financing for you and take your car payments directly. These loans tend to have higher rates than standard car loans.

3

Call the dealership from which you want to buy a car. Ask what the general credit requirements are to get financed and whether options are available for borrowers with bad credit. If the dealership has an arrangement with a specific lender, you may be able to call the lender and talk to a loan officer about the likelihood of getting approved.

4

Go to a credit union or local bank and talk to the loan officer. Smaller banks and credit unions may be willing to take a chance and lend you the money, especially if it is for a small amount. Explain the circumstances surrounding your bad credit and the steps you are taking to rectify the matter.