First-Time Car Buyer? Don’t Be Afraid of Bad Credit!
Whether you need to get back and forth from school, or your job, owning your first car is always an exciting milestone for any young consumer. But first-time buyers can run into some major roadblocks along the way – such as having weak or little to no credit history.
So, before you start running off to a dealership, it's crucial you begin planning out how you're going to afford that key to freedom.
Understand Your Budget
First and foremost, find out how much you can afford to pay. There are tons of tools that will help you answer this question, but the general rule of thumb is to pay no more than between 10% to 15% of your monthly income.
Qualifying for your loan
Unfortunately, it's not always easy to get approved for a loan. Lenders always need to check off a list of boxes before they can give you their stamp of approval. The most important of which is your credit score.
Your credit score is made up of many categories, but basically, it is a measure of whether or not you will pay your debt on time based on your credit history (i.e. how you have paid off other loans). Scores range from 300 to 850, with higher scores being better.
Unfortunately, a lot of younger consumers don't have enough credit history and end up with either no score or a weak score. Thankfully there is another way to gain credibility with lenders: alternative credit scores.
What is an Alternative Credit Score?
Unlike a traditional credit score, alternative credit scores refer to payment information associated with regular expenses such as phone, internet, and utility bills.
This score will help round out your credit and give you a better chance of being approved for a loan. (Which means getting a car even if you have a bad traditional credit score)
To get your alternative credit score check out Connect. We are a 100% free service which will not only give you your alternative credit score but will help you manage and organize your bills and accounts.
Get Your Loan
We are almost there! Now that you have all the right information, the next step is to speak with a lender. It's important you find the best deal possible, so be sure to speak with more than just one or two.
Keep in mind that the less it costs to finance your car, the more money you will have for other expenses, like insurance and maintenance.
Drive Off Into The Sunset
With all the nitty-gritty detail out of the way, it's time to enjoy the fruits of your labor! Step into your car, turn the ignition, and enjoy that new car smell.