How to Buy or Lease a Car With Bad Credit

If you have bad credit, buying or leasing a car will be a challenge. However, if you take steps to improve your credit to show that you are more responsible now than you were in the past, you will have a better chance. Follow these steps to improve your credit so you can buy or lease a car.

Instructions

1

Decide how much you can afford monthly for a car payment. Begin to put aside that much money monthly. Some of this money will go toward improving your credit, while some will go toward a down payment on a vehicle. Continue paying all of your other bills in full and on time.

2

Open a credit card account and a store card account if you don't already have some. Don't worry too much about interest rates, because you aren't going to carry a balance. If you already have charge cards, pay extra to lower their balances. If you got new cards, charge $50 to $100 per month on each card and then pay off the balance as soon as you get the bill in the mail.

3

Save the rest of the money that you would normally allow for a car payment in a savings account. Follow this plan for 6 to 12 months.

4

Find a reputable car dealership that works with people who have bad credit. Ask friends and family for references. They may know of a particular salesperson who tries hard to get good deals for his customers.

5

Expect to pay a much higher interest rate than people with good credit. Have your down payment ready when you walk into a car dealership, but don't let them talk you into a higher down payment or monthly payment than you can afford. Otherwise, you may get yourself into more financial difficulty than what you started with.

6

Show the dealership on your credit report the new accounts that you have been taking care of. Point out that you can now pay your bills and have a down payment available.

7

Get a car that you can afford. You may have to settle for something that isn't quite what you wanted. However, by buying or leasing this car, you will be building up your credit so that you can get the car you really want next time.