Consider this scenario: You applied for an auto loan from a bank, but you were surprised to learn that your application was denied. The officer in charge explains that their decision has something to do with your credit. The officer continues to explain that they don’t offer auto financing for people with bad credit. They provide premium offers only to those clients whose credit scores stand strong. Your score, however, is under the subprime territory.

When the credit you carry is less-than-stellar, seeking for a car loan with affordable terms and rates can be a bit of a challenge. Your auto financing chances are slim because you pose a significant risk to lenders. Worry not because if you’re viewed as a subprime borrower, it doesn’t totally mean that your loan approval days are over. You still have a chance to seek for a car loan, but this time, from a different lending company.

Here are some tips that can help you succeed.

Review your credit

It’s imperative to review the current condition of your credit, even if you already know that it’s in a bad state. You can either request online for a copy of your report through www.annualcreditreports.com or order directly from one of the three major credit-reporting firms. Make a good inspection of all bad credit entries for mistakes, because the credit companies sometimes commit mistakes and report incorrect entries. Surely, you may have charge-offs or late payments, but the companies might report a different date or some other errors. Don’t be afraid to dispute anything that is irrelevant because this is your right to do so.

Before you start finding the perfect car loans for bad credit, you have to dispute factual errors first, because it takes several months to verify your dispute and correct your record. This is why the first step is to review credit months ahead of your planned car loan application. After everything is set in place, you’ll receive a new credit report copy - start assessing for the changes on your files. By this time, your car loan chances are higher with every incorrect data removed on your file.

Look for co-signers

If you know a relative or friend that has an excellent record, you can ask them to co-sign the loan with you. This is a risky move, though; because if you cannot handle the payment because credit is badly hurt, there’s a chance your co-signer will drive off in the long run. On the positive side, co-signers can help you become eligible for the loan without further inconveniences, so you have to be firm with constant payments and you have a stable job to sustain your monthly expenses.

Clean up your record

If you want to last with your bad credit car loan, you have to make some positive commitments. The first step is to create a budget plan. Always set up a budget for your payment and see to it that you’ll never miss even one. To ensure that you can afford the loan repayment, try looking for cheap cars that are still in good running condition. Face the fact that your credit has some dingles in it – just buy what you can afford. Cleaning up your record can be done by making constant payments, which is much easier if the car loan that you chose is budget-friendly. Take note that one way to re-build your credit is by having a good slate of repayments, so a bad credit car loan is somehow helpful during this time.

Amy is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. Know more on the worth of an identity theft insurance to prevent bad credit and id theft.