Unless you live in the city, chances are you need a vehicle. Times have changed and we are a much more fluid world with people easily traveling between cities, states, even countries a daily basis without giving it a second thought. We live in a suburb. We don’t really have Ubers, taxis or public transportation around here. So that means, more likely than not, you are going to need to qualify for a car loan. Before you apply for your car loan there are a few things you should do first.
Check your credit score! With all the places you can check your credit score for free, it’s a good idea to pull it before you start looking for a car loan. Know what you are working with instead of getting caught off guard by some unexpected event on your credit report.
Check your credit report over for any errors. I know that sounds silly but it does happen. When I went to purchase my first car I found out that a lot of my brother’s financial information was on my credit report. We have similar names and social security numbers so it’s easy for someone to enter the data under the wrong profile. It was fairly quick fix that my loan officer helped me fix but I still pull my credit report annually to check it over and make sure there are no errors.
Next, make a budget. What can you realistically afford each month? Take all your set expenses like car insurance, renters/home insurance, medical insurance, rent/mortgage, property taxes, utility bills, etc and put them in a spreadsheet. Add in other expenses like clothing, eating out and activities. I know it sounds silly to budget for those but do it, otherwise, you may overextend yourself. Now, add a line for a car payment and car insurance as well as car maintenance cost and gas. These are all expenses that will come with having a car.
Gather your pay stubs and tax returns, these may be needed when you go for your auto loan. It’s best to have that information pulled and together before you start than to scramble and try to find it.
Those are just a few tips to help get approved for your next car loan. Hope they helped and I hope you find the car of your dreams!