If you’re a first time car buyer with a poor credit score, you might be wondering how to get the best interest rate possible. The good news is that it is possible to get a decent interest rate even with a poor credit score. Here are a few tips to help you get the best interest rate possible:
Improve your credit score.
If you have a poor credit score, you can try to improve it before you apply for a loan. There are a few things you can do to improve your credit score, such as paying your bills on time and keeping your credit card balances low.
Shop around for the best interest rate.
Don’t just accept the first interest rate you’re offered. Shop around and compare rates from different lenders. You may be surprised at how much interest rates can vary from one lender to another.
Get a cosigner.
If you can’t get a good interest rate on your own, you may be able to get a cosigner to help you. A cosigner is someone who agrees to sign the loan with you and be responsible for the loan if you can’t make the payments.
Bring down your debt-to-income ratio.
One factor that lenders look at when considering a loan is your debt-to-income ratio. This is the amount of debt you have compared to your income. The lower your debt-to-income ratio, the better your chances of getting a loan with a decent interest rate.
Offer a larger down payment.
The size of your down payment can also affect your interest rate. If you can afford to, offer a larger down payment to get a lower interest rate.
Following these tips can help you get the best interest rate possible as a first time car buyer with a poor credit score.