If you are one of the many millions of Americans that don’t have a high enough credit score or FICO to quality for good or excellent credit, then for you to get financing for your next consumer purchase, especially a new or used car, you need to look into what are known as subprime loans. Particularly when considering buying a car, there is a large sub prime market that’s been established for the specific purpose of providing credit to those who are credit challenged.

Depending on whether you have fair credit, poor credit (which is not as good) or bad credit, there are subprime auto financing loans that have been set up with this in mind. What distinguishes these loans from non sub prime loans is largely the interest rate. It’s higher on subprime loans and the lower your credit score when you apply, the higher the rate. But don’t get too discouraged because there’s a wide range in rates and quite a number of lenders, especially on the internet, offering sub prime loans.

Here’s the advice I would give someone who is looking for auto financing with bad credit:

1. Look first for the financing and then the car. Don’t waste time looking at a car you can’t get financed. Especially when working with auto dealers they have a number of models, new and used, that they have a lot of incentive to sell. On these, they are often willing to be more creative and helpful when it comes to financing.
2. Shop for financing. Don’t accept a turn down by one dealer or lender as the response you are going to get from everyone. The auto financing market is a very large one with many different players. Check out several and you’ll begin to see that some are going to offer you better rates than others.
3. Try and put some money down on your next car purchase. This serves several purposes including letting the dealer know you are serious. Even a few hundred dollars can make a big difference in this area.
4. Start now taking those steps needed to improve your credit score so even if you have to use subprime financing to buy this car, you can expect your credit to improve by the time of your next purchase. Things you can do include:
1. Make every effort possible to meet payment ‘due dates”
2. Make at least the minimum payments if possible. If you can’t, call and talk with the lender. You’ll be surprised how many are willing to work with you.
3. STOP using your credit card. Keep your credit debt where it is and starting, if even slowly, getting it reduced.

These are ways that will definitely make a difference in getting auto financing if you have bad credit.