What Are Some Good Tips For Sub-prime Borrowers?

So, your friend says that they just got a great car and that the representative at the bank was fantastic

. What you do is what your friend did right? You go to your bank and tell them you want to get a car loan. I mean its simple right? Well, in this case, it may not be that simple. You have just found out that your credit has dropped significantly in the past 4 years since you have been to your bank. You know you were late on some of your credit card payments and cell phone bills but you didnt expect this. The result, denied for loan. You are now in the Sub-prime category. What do you do now?

Firstly, you dont exactly know what it means. At first it actually sounds favourable. Under prime? Maybe that means I get a rate even lower than prime? What it means is that your credit score is under 680. This puts you into a separate category. Being deemed as sub-prime doesnt mean that your days of borrowing are over or that you have to pay cash for everything. What it means is that due to your current score, you only qualify with certain lenders and at a higher interest rate. Dont despair though because there are plenty of lenders that specialize in sub-prime lending. A lot of them are actually excited to have the opportunity to lend you money as you are in their market. What it really comes down to is, good credit.... a lower interest. Bad credit.... a higher interest rate. It is only natural that you cant have it both ways. So, what is my next step?

Check your credit report. Make sure that everything on your report is accurate. If something has been paid off but still showing as not being paid, make sure you have that adjusted. Contact your credit bureau with any questions or concerns. Access your credit score. Contact the bureaus to get your report and score. Also, there are ways to access your score though these bureaus online for your convenience. Dont rely on the dealer. Try and secure a loan before you walk into the dealership. Dont feel discouraged that your credit score will stay this way forever. Remember that the score changes all the time. Its actually beneficial to you to get a loan and make regular payments as it helps improve your credit score and will get you back into the prime rate in no time. You may have to pay a bit more for the car and loan now but soon you will be back in the drivers seat and the right sub-prime dealer may help you get there.

by: Rick Li

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