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Battling a credit score under 650 or lower? Fear not!

Quick notes

– Getting a cosigner might be your golden ticket to a more favorable loan

– Some bad credit car dealerships and lenders are more likely to take on bad credit loans and might even offer better terms

If you’re dealing with low credit, first off, know that you’re far from alone! Many of us have dealt with credit hits at one time or another, and there is a way out. Even better, there’s a way you can still get a loan and buy a car despite having bad credit.

Why does your credit score matter so much in the first place? Your credit score dictates what type of interest you’ll end up paying on your car loan, and nine times out of ten, a low score means a higher interest rate.

Fortunately, there are still ways for you to buy a car and even boost your credit score at the same time. Before we get that, it’s important to note that most experts agree that if your credit is bad, it’s best not to purchase a vehicle with a loan unless you absolutely have to. With that out of the way, let’s start with the first step…

Check your credit score for yourself

First and foremost, check your credit score for yourself. Never take a dealership’s report as gospel until you’ve seen an independent report with your own eyes. You are allowed to perform a free credit report check once every twelve months, and this will allow you to see what activity has affected your score and if there is any suspicious activity on your report.

Never take a dealership’s report as gospel until you’ve seen an independent report with your own eyes.

Bring your credit report with you when you meet with potential lenders and bad credit car dealerships so that you are on the same page when you discuss your financing.

Think about getting a cosigner

A cosigner is someone who will effectively “guarantee” your loan by signing it alongside you. This can be very helpful if you have bad credit, your debt-to-income ratio is too high, or you have an income that varies often. You would be best to choose someone with strong credit who will boost your application.

You and your cosigner should both be aware that in the event you are unable to fulfill your loan obligations, the cosigner will be responsible for making the payments. If you’re confident that you can make your payments, then a cosigner is a relatively low-risk method for getting a more reasonable interest rate.

Find a bad credit car dealership to work with

Some dealerships are more likely to accept bad credit applications than others. In fact, some dealerships even advertise that they can qualify anyone. Beware: if it seems too good to be true, it might be. The rate will no doubt be higher than usual which is to be expected, but make sure to read the entire contract before signing anything. You’ll want to watch for any additional fees being tacked onto the loan.


If you’ve had a long relationship with your bank and can explain a negative credit history, they might be willing to work with you to get you an auto loan. Different lenders qualify “bad credit” at different levels, so perhaps your case might not be as bad as you think.

Whichever lender you choose, make sure you shop around and do your due diligence. Bad credit can feel like a nightmare, but if you stay on top of your payments, you can rejuvenate your score and qualify for better loans before you know it.

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