It is going to be difficult to lease or buy a car with bad credit. Leasing a car with bad credit is out of the question, lenders won’t even consider you for a lease. If you have judgments, foreclosures, collections or repossessions on your history report, forget about getting approved for a lease. (Keep in mind there are different levels of “bad credit”). However, if you have a co-signer with good credit you could lease a vehicle. You are better off rebuilding your credit and trying to buy a car if you have really bad credit.
Now, having said that…
If you have lots of cash to put down as the down payment and let’s say that your credit is only a little less-than-ideal. You may be able to lease a vehicle. There are some lease programs that may work for you. Ford’s Red Carpet leasing program has been known for working with those who have lower credit score ratings.
Pull your credit report so you can see exactly what you are working with. Your FICO score is what the majority of car dealers and manufactures look at when considering you for a lease program. When you go into a dealership or talk with an auto broker, show them your score and see if they can get you approved before they run your credit score again. You are working at raising your credit score, credit checks count mildly negatively toward your rating. Once they see your score they should be able to tell you if they can get you approved or not.
If you don’t have a copy of your credit report, you will need to get it so you know how you score and what you are dealing with. Clean up your credit history as much as possible before going out looking for a car. Pay off any collection actions and remove any negative information that isn’t true or was put on your report in error. After paying off any collections get a letter from the creditor stating that you paid them. If you are paying them over time, get a letter each time you send a check to them.
Getting an auto loan is one of the easier loans to get if you have bad credit. This is because your loan is secured by the car. The bank is protected in the event you default on the loan. They will just come and get their car if you don’t make the payments.
You won’t necessarily get the best interest rates or be able to get the most expensive car on the lot. However, getting financing shouldn’t be a problem.
Save at least $500 or more for the down payment, unless you are going to be trading-in a car that is worth more than that. Now locate a dealer or auto-broker that works with people who have bad credit.
Choose a car that fits your budget. Once you get your loan, make all your payments on time so you can keep improving your credit score ratings.
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