Having bad credit is more common than you think! Here at Rainbow Motor Sales, we don’t believe in letting a low credit score hold you back from purchasing a reliable vehicle. Below we’ve compiled some simple tips to help you buy a car – even if your credit is less than ideal.
If your credit isn’t the greatest, consider diversifying the type of vehicles you’re open to. To get the best auto-financing deal, it’s important to consider the non-negotiables you’re looking for in a reliable vehicle and possibly forgo all the bells and whistles that aren't all that necessary. Do you need an SUV to seat a family of 6? AWD for those Coldwater winters? Enough cargo space for groceries and strollers? Know your needs, and the nice-to-have features can come later!
Some dealers will try to get you to pay lower upfront costs. While that might offer some savings, it's not always helpful for people with bad credit. The truth is, if your credit isn’t all that good, providing a higher down payment will increase your chances of getting approved by lenders. We suggest putting down at least 10 to 20% to ensure you get the best terms and interest rates. And yes: we will happily work with you on trading in your current vehicle as equity!
For lenders to feel good about providing an auto loan to someone with bad credit, it's important you have all the requested documents handy, These include recent pay stubs, utility bills, proof of residence, proof of insurance, 5 to 6 references, bank statements from the last three months, updated license and tax returns if possible. This will not only ensure a smooth process but will also prove you’re a responsible candidate to lenders.
While not always necessary, a co-signer is an excellent way to boost your chances of getting a low-interest rate and better terms when your credit is bad or non-existent. Try to find a co-signer with a high credit score of at least 750 as well as a longstanding credit history. Someone known for consistently paying mortgages, car loans, etc. and has incurred little to no debt is ideal.
Here at Rainbow Motors, our number one goal is to see you drive away happy, whether you have good credit, bad credit, or no credit. For more information about our finance-first approval process or bad credit financing, don’t hesitate to contact us anytime!