Auto Finance Tips for Those with a Bad Credit Score
Credit scores are among the key factors lenders take into consideration before approving a loan application. One of the most used credit scoring models, FICO Scores rates credit between 300 and 850. A credit score below 669 is considered fair or poor. Many believe that a bad credit score makes it difficult for any loan approval. However, that’s not the truth. Many banks and lenders approve car loans even if you have bad credit. While it may cost a lot in the long run, there are certain things you can do to increase your chances of getting your loan approved. 1. Getting a cosigner Your chances of getting approved for a car loan increase by a significant margin if you have a cosigner with a good credit score. Moreover, it can also provide you with a better rate of interest on the loan. The concept of cosigning is essentially assurance of repayment from a third party. Cosigning on a loan application means that the lender is guaranteed his/her money back. If you fail to repay the loan, the cosigner assures the lender that he/she will pay for it. This boosts your loan application towards approval as the lender feels less at risk.
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