If you have good credit, financing a car should be a breeze. However, if your credit is less than perfect, it can be a bit more challenging. Fortunately for you, it is possible to get a car loan with bad credit. It is important to pay close attention to the details, though. If you have bad credit and are looking to secure an auto loan, here is what you need to know. 

Get Your Credit Report

Even though your credit is not good, it is important to know exactly what is on your report. A free credit report is available through Annual Credit Report each year from the three major bureaus.

When you review your credit report, look for accounts that are not yours or those that should have been removed from your report. You can dispute those and possibly effect a positive change on your report and credit score. It is important that you file a dispute with each credit bureau. Sometimes disputed items are removed from one credit bureau's report, but not the other.

If possible, pay off any accounts that are in collections. You should also catch up on any payments that are in arrears.    

Be Prepared

When you are ready to apply for a loan, collect all of the documents needed to review your financial situation. Documents, such as your pay statements and utility bills, can help the lender get a clear picture of your finances.

To help present yourself in a better light, also, take any proof of recently paid off debts with you.

Explain Your Financial Situation

If your current credit situation is the result of decisions made in the past, a medical crisis, or another issue, explain it to the lender. You can also reassure the lender that the problems are in the past and you are working to improve your situation. You want the lender to understand that you are a better credit risk now.

Be Realistic

You will not get the same loan terms that someone with good credit would get. However, you do not have to settle for an absurdly high interest rate. When reviewing the loan offer, do not overestimate what you can pay. Stick with a loan that you can reasonably pay off.

Obtaining a loan with bad credit is not entirely impossible, but it can take some work. Consult with a lender (such as one from Leopardi Auto Sales) about the best ways to make yourself more desirable so that you can secure a better loan in the future.