It may not always be possible to put yourself in a negotiating position when you have bad credit, but you can certainly put yourself in a better position if you follow some of these 5 ways so you can get a good interest rate with bad credit.
Number 1 – Get Independent Legal Advice
There are many specialist legal firms that assist with cleaning up your credit file.
Quite often defaults are listed on people’s credit files without those companies going through the correct procedures. If they cannot provide evidence of following the correct procedures, they may have to remove the default from your credit file, which possibly can leave you with a clean credit file and giving you the option to apply for normal car loans.
Number 2 – Clean Up Your Credit File
If you can, contact all the creditors that have listed adverse history on your credit file and make arrangements to get them paid, and in as little time as possible. You will get a better interest rate with paid defaults on your credit file, than if they were unpaid.
Number 3 – Follow Through With Any Disputes Right Until The End
The creditors will often play hard-ball with your credit file, and they will often seem non-negotiable and if you make payment, this may be in their eyes acceptance of your disputed default.
Don’t just give up, as they won’t give you much joy and hope that you just pay and go away. If you just bury your head in the sand, your problems won’t go away. If it stays as unpaid, it may be relisted and your default may stay on your file for another 5 years.
Get advice from the relevant industries Ombudsman if you have been unable to come to a resolution with the creditor and perhaps they can step in and have the dispute resolved, or get some legal advice.
The small professional legal costs, if any to have the default removed off your credit file is well worth having a clean record and being able to obtain the best deals for you, which may be impossible if you have bad credit.
Number 4 – Conduct Other Loans Perfectly
If you have any other mortgages, personal or car loans, keep these conducted perfectly for a minimum of 12 months. With good checkable credit, your bad credit may not be as big an issue with some of the mainstream lenders, giving you access to good interest rates.
If this loan is a first loan outside your bad credit being listed, it is much harder to get someone to give you a second chance, and you may not be able to have many options to get good interest rates.
Number 5 – Keep Your Employment & Residential History Stable
Prior to applying for your bad credit car loan, try and stay with your current job and residence for a decent length of time. The longer the better, as you will appear a better risk and could make the difference of getting a better interest rate.