{"id":2533,"date":"2021-11-09T21:16:21","date_gmt":"2021-11-10T03:16:21","guid":{"rendered":"https:\/\/going-places.thegeneral.com\/buying-a-car-with-bad-credit\/"},"modified":"2025-08-27T10:05:14","modified_gmt":"2025-08-27T15:05:14","slug":"buying-a-car-with-bad-credit","status":"publish","type":"post","link":"https:\/\/www.thegeneral.com\/going-places\/blog\/car-and-driving-basics\/buying-a-car-with-bad-credit\/","title":{"rendered":"Buying a Car with Bad Credit"},"content":{"rendered":"\n

If you have a low credit score, buying a car<\/a> can be a challenge. Lenders decide your interest rate based on your credit score, and a low credit score will result in a higher interest rate. In some cases, your loan application can get denied due to your low credit score. However, while buying a car with bad credit can give you less negotiating power, you can still secure an auto loan with the proper preparation.<\/p>\n\n\n\n

What Is Credit?<\/h2>\n\n\n\n

Credit<\/a> is an agreement in which a borrower acquires something valuable and pays the lender back later. Most consumers don\u2019t have enough cash on hand to pay for a house or a car upfront, so they use credit to purchase these larger items. For example, if you\u2019re trying to purchase a car, you can take out an auto loan on credit and pay off your loan over time. Loans let you borrow money that you need to repay with interest.<\/p>\n\n\n\n

Your personal credit score is a measurement of how likely you are to repay a loan in the eyes of the lender. If you have good credit, the lender will usually offer you a lower rate because they believe you can make the payments on time and fully repay the loan. The opposite is also true: if you have a low credit score, the lender will charge you a higher rate of interest as a form of protection in case you don\u2019t make the payments on time or in full.<\/p>\n\n\n\n

How Is Credit Score Calculated?<\/h2>\n\n\n\n

Your credit score is based on your credit reports<\/a>. The most widely used credit scoring system in the U.S. is the FICO score, which ranks your credit score from 300 (low) to 850 (high). The higher your score, the more likely you are to get approved for your loan and charged a lower interest rate. You are entitled to three free credit reports per year from each of the major reporting agencies, but your information might vary slightly from agency to agency depending on the information they have. The FICO credit score uses the following five components to calculate your credit score:<\/p>\n\n\n\n