If you’re someone who’s been stricken with bad credit, it doesn’t necessarily mean you don’t have a chance at securing car finance – it just takes a little careful consideration, a few extra steps, and a supportive broker on your side to get you where you need to be. If you want to make an informed decision on how to move forward with financing, or you’re just wanting to know what tips for financing a car with bad credit you should implement to make the process easier, continue reading.
If you want to engage a supportive broker but you’re unsure where to start, contact the team on 13 FIDO today! Alternatively, take a look at our How it Works page for the steps you need to take in securing finance with Fido Finance.
Tips for Financing a Car with Bad Credit
Manage Your Savings
Showing that you are good at saving money is one of the best tips for getting a car loan with bad credit – especially in order to look financially responsible towards a lender. This doesn’t mean you have to have a lot in your bank account, but it does mean that you should have enough money to be able to cover direct debits.
Pay Your Bills on Time
Another way to benefit your potential in securing car finance is by paying your bills on time, every time. Not just asset bills, but bills such as your phone repayments, utilities, rent, and so on. It is not uncommon for potential lenders to call your real estate agents or landlord to check whether you pay these things on time – it makes you look reliable.
Stay Away From ‘Pay-Day Lenders’
These specific lenders are used for short term finance – which isn’t what you want (even if you think you do). Despite the belief that small loans initially will help you in the long run with a larger loan, it isn’t the case at all. If you see anything online about tips for buying a car with bad credit that encourages engaging a pay-day lender at all, walk away. Your lender will see this as a struggle on your behalf, that you cannot live off of what you earn.
Don’t Spend More Than You Earn
It is not uncommon for financing companies to ask to see your bank statements. This is so they can assess your application based on your spending habits – this is one of the most important things to note before going into the process of securing finance at all. Having bad credit ratings AND unhealthy spending habits will not look good. So, if you’re thinking of financing a car in the future, it’s important you start budgeting your income, so that you know what you can spend, and what should be saved towards repayments.
Be Realistic About the Car You Want
An important thing to note is that bad credit will attract higher interest rates, making it more so paramount that you think realistically about the type of car you are going to finance. As much as we would love to drive our dream car, starting small is the best way to prove yourself, and a great way to present your application the first time you reach out to a broker or lender (it is also less of a risk for the lender).
Be Patient
If you have bad credit, you need to have patience. Gaining a positive credit score is not going to happen overnight, and neither is approval on your car finance. Follow the above tips for financing a car with bad credit, ensure you’ve taken the right steps, and then ease into the process. It’s better to take it slow, rather than rushing in, making mistakes, and prolonging what could be a quick process. Need some help? At Fido Finance, we have a panel of over 40+ trusted lenders as well as a team of award-winning brokers keen to support you. Ready to get on the road to financing your next car?
