Are you in need of a car loan but you have bad credit? Don't let bad credit keep you from owning your dream car!

How Do I Know If I Have Bad Credit?

When applying for credit of any kind and you're turned down time after time, this is usually a very good indication that you have bad credit. The best indicator is your gut feeling. Pay attention!

Negotiating a Credit Deal

Once you have admitted that you have bad credit, it's time for you to take some positive steps. Negotiate a deal that works for you! Even though you have bad credit, negotiate the way a person with excellent credit would. After you have negotiated the best price for the car and trade in, if any, then you can mention that you have less than excellent credit - bad credit.

FICO Score and Applying for Credit

Keep this important information in mind though; you should not apply to banks or other lending institutions more than once - especially if you have bad credit. Every time you apply for credit through a bank or dealer, your FICO score will be lowered each time your credit is run. However, you can obtain a copy of your own report through a site like TrueCredit.com, because a personal inquiry will not lower your FICO score.

If you're in the market for a loan for your "dream car" (or any car), be sure you review what's coming in each month; include car payment, insurance, upkeep and repairs and other monthly obligations and don't forget to monitor your credit. The banks want to be in an equity position when lending to a person with bad credit and will only loan 80% of the MSRP, in case you default on the loan. If you are good at negotiating and if you negotiate in the approved manner, you should be able to buy a car at 90% of the MSRP and only have to put down 10% to get the loan to 80% of the MSRP.

Applying for Credit

If your credit score is below 600, you may want to consider apply directly through capitalone.com; they are the most lenient with those who have bad credit. They will loan 115% of MSRP and this means you wouldn't have to come up with any down payment. Though the interest rate is high, this gives the person with bad credit some real "negotiating power." You can say something like, "I have this rate. If you can beat it and not require a down payment, then I'll do the deal through you." Even the down payment can be negotiated. Keep in mind though, the more money you have to put down on a car, the better your chances are of getting into your dream car. A word of advice: "When you go out to buy, don't show your silver."

Methods of Payments to Ensure Good Credit

One way to ensure timely payments is to ask for automatic withdrawals; in fact, banks often require it when extending a bad credit loan. This means you should have a checking account or a savings account.

When you have negotiated the best deal for you and you have done all that you've agreed to do, you may never have to experience bad credit and you'll have the car of your dreams!