How to Purchase a Car With Poor Credit

In today’s society, owning a vehicle is more need-based than want, as transportation from place to place is becoming more essential. When purchasing a vehicle, many buyers are unaware that a low credit score can hurt your ability to buy a car. Your credit score speaks to your management of financial risk, and a low score can make companies deny you financial assistance.

Additionally, a low credit score can raise the interest rates on buying a car. If you are considering purchasing a car and have poor credit, do not become discouraged. There are several options available to you.

How to Qualify for a Car Loan with Poor Credit Scores

Attempt to Improve your Credit Score Prior to any Large Purchase

Improving your credit score before shopping for cars and inquiring about loans is a good first step. The effort you put into your score will make you more favorable to loaners and will up the odds of your loan getting approved. Some ways to restore your credit include paying late amounts or disputing any errors made.

Find an Open-Minded Loan Provider

Poor credit can greatly hurt your chances of having a loan approved. A low score often indicates financial risk, meaning lenders will assume there is a higher chance of you not paying off the loan. Do not worry, there are loan providers who are willing to negotiate and help those with poor credit.

Keep in mind that there are most likely others with lower credit scores, so you might actually seem appealing to a lender. Finding someone open-minded to delegate with is not impossible.

Look at Loan Terms

Be wary of offers with low monthly payments. In the long run, these may end up being more expensive due to a higher APR. When investigating loan options, keep an eye out for the lowest APR in the shortest period of time possible.

Considering the loan in full terms instead of just monthly payments will ensure that you are aware of how paying off the loan will impact you over time.

Getting Pre-Approved

Obtaining a pre-approved status from a bank or other financial institution can make it far easier to obtain a loan. Your poor credit can be overlooked or reconsidered by a lender if you become pre-approved.

Becoming pre-approved will not only allow you to know if you will be eligible for a loan, but it can also tell you the size of the loan you could receive. This is helpful when investigating price points for the vehicle you want to buy. Getting all of the paperwork completed in the early stages can greatly reduce your stress levels.

Increase Your Down Payment

Poor credit can often make your purchasing options scarce. Increasing the down payment on a car you buy can help offset other costs, such as the interest rate or taxes. Not only this, but more vehicle options can become available to you.

Selecting a Vehicle

Loan providers see different cars as having different values. Vehicle age and mileage are just two of many factors that may change the amount your approved loan is. Selecting a certain vehicle may give you the outcome you desire.

Good Standing

If or when you do get accepted for a loan, it is important to remain in good standing. Making sure payment are made on time and correctly is essential for ensuring your credit score does not worsen. If you have the opportunity, it can be a good idea to make bigger payments to improve your score and save money on the interest rates.


If your credit is truly at an unmovable low score, using a cosigner on a loan can increase your chances of approval. It can also improve the interest rate.

A cosigner is bound to a loan by covering the payments if you are unable to, so be aware of keeping your monthly dues paid.

Avoid Trading Up

Dealerships and companies may offer enticing vehicles for just a slightly increased monthly payment, but it’s important to prioritize your set budget if you want your credit score or loan approval odds to increase


Some states may have nonprofit organizations that will aid customers in becoming approved for loans or vehicle purchases.

Places to Shop with Poor Credit

One of the most helpful organizations to people with low credit scores is This website will match customers with potential loan providers with just the click of a button. For the website to approve you, you must have earnings of at least $1,800 per month or $21,600 per year and no declared bankruptcies. Keep in mind that MyAutoLoan will restrict loans to newer cars with fewer mileage.

Another place to investigate is Capital One. With over 10,000 dealers accepting their financing, Capital One also offers low interest rates and informative resources to customers. To qualify for financing for used vehicles, they must be no older than 10 years, have fewer than 120,000 miles. also provides auto loans to buyers with bad credit. This website aids customers with all types of loans excluding lease buyouts. However, customer testimony has noted that their loans come with too many restrictions and credit checks are too frequent.

Finally, Blue Sky Auto Finance is another solid option when attempting to receive an auto loan. This website stands out because it allows buyers who have declared bankruptcy to apply, as long as it has been discharged. This resource requires a credit score of 550 or higher and a monthly income of at least $1,800.


When applying for a loan with poor credit, things can seem bleak and impossible. But do not worry, obtaining a loan with bad credit is not unachievable. Most loan providers will attempt to approve you with higher interest rates, so it is essential to improve your score before you apply.

Conducting your research and investigating with various lenders and loan providers will guarantee that you find the loan that is affordable for you.