Bad Credit Car Refinancing

Written by Jeremy Horelick
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Lots of companies advertise "bad credit" financing for those who have black marks on their credit reports. In reality, if you've been plagued by financial problems in the past, you have one of two options. You can either qualify for a loan at a less favorable rate, or you can work to eliminate the negative items from your report. As it turns out, most people go with option one, simply because it's the easiest.

No matter how many "incidents" have been reported to the three major credit agencies, there is always a lender who's willing to extend you a line of credit. You'll wind up paying a 25-, 30-, or 35-percent APR, but you'll qualify for a loan nonetheless. While this may be a cause for celebration in your household, consider this: Over the course of a five-year loan, you may well end up paying for your car several times over. Not exactly a reason to bust out the confetti and streamers.

Repairing Bad Credit

If you don't know what's on your credit report, there's no way you can set about rectifying the problem or problems. By law, you are entitled to one free copy of your credit report, though there may be some administrative costs associated with ordering it. Better to suck it up and pay the nominal fee than to continue on blindly in the dark hoping for divine intervention or a winning lottery ticket.

Now that you have your credit report in front of you, you should be able to see why you're only qualifying for exorbitant interest rates. If you feel that any of your "dings" have been placed there by mistake, you have the right to dispute these incidents. You may, however, need to contact the creditor who placed them there to begin with. Another option is to write directly to your credit bureau and explain your plight. The bureau can then tell you the fastest way to resolve your outstanding credit issues and clean up your record.

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