Financing a Used Car With Varying Credit

Check Your Credit Score

When it comes to financing a car, the first thing you'll want to do is find out where you stand based on your credit score.

If you don't fully understand credit scores, then you're not alone. You'll likely be most familiar with the FICO scoring system, which has a tier system based on scores from 300 to 850, where the higher your score, the better. The tiers are:

• Super-Prime: 781-850
• Prime: 661-780
• Nonprime: 601-660
• Subprime: 501-600
• Deep Subprime: 300-500

Most people's scores will fall  in the mid-600s, but if your has fallen a bit lower, that's okay. There are still ways you can finance the used car of your dreams.

Reduce the Amount You Need to Borrow

A great way to improve your chances to obtain financing for a used car with varying credit is to reduce the amount you need to borrow. There are a couple ways you can go about doing this.

The first is to negotiate your down payment. The more you put down at the beginning of your transaction, the less you'll have to pay over time, meaning you'll have to borrow less.

Another way is to trade in your current vehicle. When you trade in a vehicle, we put its value toward your purchase, and you'll likely get more than if you were to sell it outright. If you're curious about how much your car is worth, you can use our KBB Instant Trade Offer to get an idea.

Other Helpful Tips

Another way to finance a used car with varying credit includes having a co-signer lined up. A co-signer should be someone you trust who's willing to back you. They'll have no ownership stake in the vehicle, but they'll assure creditors that you will continue to make payments.

The best way to finance your next vehicle is to show that you can afford the loan payments. Be prepared to show documents proving:

• Sources of Income
• Credit Utilization
• Payment History
• Payment-to-Income Ratio
• Debt-to-Income Ratio

Being prepared is half the battle when it comes to financing. Do your research up front and know how much you can afford. You know what they say: An ounce of prevention-or, in this case, preparation-is worth a pound of cure.