How to Finance a Car with Bad Credit

A low credit score can be caused by a number of unexpected life events such as needing to pay off a medical expense, going through a divorce, or dealing with student loan payments. If you’ve experienced low credit, you know just how difficult it can make financing a car. Luckily, there are a few steps you can take to combat your low credit score. Just take a look below to see how you might secure financing for your next vehicle.

1. Improve Your Credit Score

Alright, so our first point is a little bit obvious, but the best way to finance a vehicle with a low credit score is to simply improve your score. It may be low because you missed loan payments in the past, you had your identity stolen, or because you simply haven’t built up any credit, but regardless, you can start increasing your score right now. While you may not be able to drastically improve your credit score before you invest in a vehicle, a recent history of good credit behavior could lead you secure financing.

2. Know What Your Credit History Looks Like

A lender may deny your request for financing for a variety of reasons, so it is important that you understand your credit history. A lender may be willing to work with you if your score is being affected by an isolated incident, your recent history is fantastic, or if your score is low due to circumstances outside of your control. It is by no means a guarantee, but having a credit report on hand and knowing the ups and downs of your history can help you get on the same page as your lender and secure financing.

Everyone is entitled to a free credit report once a year from the 3 major credit reporting bureaus, check it out this page for more information:

3. Be Aware of Your Options

Before making a purchase, you probably compare options and features offered by different brands. Coincidentally, the same scenario applies for requesting financing. Different lenders have different standards for who they will lend to, so don’t give up after exploring only one option. Look around. See who will grant you financing and who offers the lowest interest rates. What might be a too-low credit score for one lender might be just fine for the next.

4. Look for a Cosigner

If your income does not meet the minimum requirement for auto financing or your credit is making it incredibly hard to secure financing, consider asking a family member or close friend to be a cosigner. Being a cosigner means that this individual is responsible for making your payments should you be unable to do so, so you should only consider this option if you are positive you will be able to make your payments. If you are certain, this is a quick and easy way to get the money you need.

5. Consider a Private Loan

In general, private loans have variable interest rates (rates that change based on market rate changes) that are higher than bank loans. Because of this, private loans don’t come highly recommended. That being said, if you can find a private lender who is willing to offer low, fixed-interest rates, a private loan might be the right option.

6. Work with Car City

Here at Car City, we guarantee financing no matter what your credit score is. In fact, you can drive off our Grand Rapids lot (or one of our other lots in Michigan or Indiana) for just $39 down.* We only require that you:

    1. Have a minimum income of $1,900 per month (including income from employment, SSI, disability, or another provable source).
    2. Have a valid Michigan or India Drivers License that matches your state of residence.
    3. Aren’t currently in an open bankruptcy.

We’d love to help you find a car that meets your needs, your budget, and your lifestyle. Visit for more information!

*48- or 54-month lease. $447 per month average. $1,900 minimum/month income required. $39 due at delivery. Excludes tax, title, license, and doc fees. No security deposit is required. Contact us for full guarantee and warranty details. Call 888-227-2489 for more information.

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