A recently released report from Experian Analytics shows that the delinquency rate for auto loans declined once again. This should be good news for people who need a bad credit auto loan.
Understanding the lending climate can help buyers know when it is best to apply for a poor credit auto loan. With a decline in delinquencies, can come a loosening of lending standards, allowing institutions to lend to lower credit scores. The report showed delinquencies of 30-59 days had dropped by 16% and delinquencies over 180 days (those in repossession) had dropped 29%.
Despite the good news in delinquency rates, borrowers need to take a few steps to help improve their chances of being approved.
- Get a credit report and FICO score. Correct any incorrect information.
- Shop for an affordable small to mid-size car. This means a vehicle with a sale price low enough that you can put a 20% down payment on the car.
- Only buy a car if the payments account for less than 16% of your monthly income.
With a little research and planning, even the worst credit scores can find bad credit auto loans to fit their needs.