When you need a lender to give you a second chance, you should also give them a reason as to why they should give you one, so good preparation prior to applying for a bad credit car loan is important.
Here are some tips that can assist in obtaining an approval for a bad credit car loan.
Tip 1 – Transparency
You are best to be completely honest with your application, as the bad credit car loan financiers will look deeply into your application, and if they find any discrepancies, this will give them a poor sense of trust and then may view your application less favourably. You are approaching a bad credit car loan financier for a reason, and they understand this, so your best chance is to be completely honest and not withhold any important information that could be related.
Tip 2 – Understand Your Credit File
You are able to access your credit file for free online which is a good idea prior to applying. This way you can be informed in regards to what is exactly on your credit file and if you are unsure about anything on your file, you can contact the listed companies to investigate further. The more information you have prior to your application being submitted, the less work the financier has to do, and they may find that you are an upfront, well prepared applicant which is going to help with your appeal for a second chance car loan.
Tip 3 – Banking Conduct
As the bad credit car loan financier will want to review your bank statements, the best way to give you a better chance of car loan approval, is to show some savings history, even if it is a real small amount per week, as this will show them that you can put money aside from your income and your day to day expenses. Don’t worry if you haven’t saved anything, as this will not prevent you from obtaining approval, but be very cautious not to allow your bank accounts to be overdrawn, or allow any direct debits to be dishonoured, as this looks poorly on your own ability to service the new proposed car loan, and the financier will want to direct debit your repayments, so this will be considered when reviewing your application.
Tip 4 – Credit Card Or Other Loan Conduct
If you have any other form of recent credit that has been paid out or current, and if you can show that you have had good consistent payment history by providing loan statements, this is going to help improve your chances of securing a bad credit car loan. Any financier likes good previous credit history when assessing car loan applications, so if you have a loan or credit card prior to applying, make sure you conduct this perfectly, as this will have a great impact on your chances of a car loan approval.
Tip 5 - Employment Stability
If you have just started a new job, you will need to ensure your probationary period has expired. If your job status is casual, ensure you have been with your same employer for a minimum of 12 months prior to applying. The bad credit car loan financier is looking at your employment history as your primary source of income, which will be required to pay back the loan. The more jobs in a short amount of time, doesn’t look too favourably when applying for any kind of car loan, so try and ensure your job is stable prior to applying for a bad credit car loan.