What should you do if you made poor credit decisions in the past? It is difficult to make major purchases when your credit rating is considered to be risky or low. If you want to finance a new auto and have bad credit, it will be a more complicated process to get auto financing for bad credit. Car dealerships will more than likely show you the door instead of the showroom floor. You could be taken to the "back lot pits" where there are cars that the dealer might be willing to risk for you.
Today bad credit auto finance is possible. The best form of quick approval is to have a pre-qualified co-signer. The co-signer allows you to purchase a vehicle using their name as a back-up form of repayment if you end up going into default. You will have the chance to restore your credit score by making your payments on time. If a co-signer is not a possibility, you may have to find a credit repair agency that will help you build your credit and get you on a monthly budget. This process takes quite a bit of time. You can lose your good credit score instantly, but rebuilding a bad credit score is a long process and can become stressful.
But there is good news! Several financing institutions are available that can send you to local special finance companies that will provide loans to bad credit consumers. They understand and sympathize with your situation and can get auto loans for almost anyone.
There are two types of auto loans for bad credit
; non-secured and secured. If you have nothing to be held as collateral then you would have a non-secured loan. If you do have collateral for the loan then the interest will be lower. If you fail to pay on either type of loan there will be profound consequences, and add even more damage onto your credit history.