New Horizon Business Services Inc.

If you want to apply for a bad credit car loan, taking advanced preparations is important to ensure your approval. What can you do to avoid getting rejected on your car loan? Below are practical steps that should not be overlooked.

Order a personal copy of your credit report. Okay, so you know that you have bad credit history. But how much do you really know about it? When was the last time you've taken a look at your personal credit report? If it has been 6 months ago or longer, it's about time for you to order an updated copy of your report.

Carefully check for possible errors or false transactions made on any of your accounts. It is not uncommon for bureaus to receive false reports from creditors so you'll never know if these errors are pulling down your score. If you found any error, send a dispute letter to the bureau that issued your report immediately. Request for the matter to be investigated and corrected. By eliminating false records in your report, you can quickly raise your FICO score by several points.

Also, remember that the three major credit reporting agencies (Experian, Equifax, TransUnion) work separately. Thus, the report you get from Equifax may not be exactly the same as the report issued by Equifax or TransUnion. This is why consumers are advised to obtain a copy from each of the three bureaus.

Prepare for your car loan down payment. You may be required to submit a higher amount of down payment due to your poor credit history. Hence, you need to be prepared and save up for this particular cost before submitting your loan application. Typically, lenders require at least 20% and above of the total loan amount.

Speak with your lender. Many lending companies that offer bad credit auto loans allow online application. Although this can be quick and convenient, you'll have better chances of getting approved if you would arrange a personal meeting with your lender. Aside from getting an approval, speaking with your prospective lender gives you the opportunity to negotiate for better loan terms.

Some lenders may be willing to look beyond your low credit score if they can understand the circumstances behind it. Perhaps you weren't able to keep up with your payments in the past months because of sickness or an unexpected lost of job. Because of this, your good credit rating has been badly affected. Nevertheless, if your lender can see that you're someone who is working hard to regain your good credit standing, you may be given a special consideration. In any case, whether your lender agrees or not, negotiating for a better deal is always worth the try.


About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Bad Credit Personal Loans.
Copyright 2009.