By Larry Donaldson

Graduating from college is an exciting time. It means you are facing the prospect of new career opportunities, new relationships, and maybe even a new place to live.

While in college, many students do not have the need to own their own car. That is because they live, work and play near campus. Many of them find plenty of ways to get around that don’t require the use of a car, such as on foot, by bus, and by bike.

Other college students do own cars while in school, but when they graduate they are ready to move up and into something a little bit fancier. (Or maybe just something that is highway-legal).

College Graduates And Auto Financing

Most college grads have a lot of new demands on their income and savings, including the need to secure and set up an apartment, buy new clothes for work, and spend money on dating or to support a new marriage. So, how do they afford a new or used car? Easy: financing.

In fact, grads are not alone in their need for financing: most people even into their 30s, 40s and beyond have to resort to auto financing rather than paying for a new car in full.


The challenge that many college grads face in getting auto financing is that they do not have a very well-established personal credit history. This means that lenders just do not feel they have enough information about most grads to make a determination about whether they are credit-worthy.

And, the problem is even worse if you are a graduate with bad credit.

How Bad Credit Hurts Your Chances Of Getting Auto Financing?

The only thing worse than having no credit history is having bad credit. However, this is an increasingly-common problem for grads, since many of them apply for and use credit cards throughout college. (After all, who can say no to access to thousands of dollars in credit, especially when there is serious partying to be done? Not most grads, unfortunately).

You see, many graduates leave college with a load of credit card debt that they have trouble repaying. And yet, the need for a car remains. So, what to do?

Auto Financing For College Graduates With Bad Credit: 5 Tips

If you are a recent graduate with bad credit who needs to buy a car, here are 5 tips that can help:

1. Understand that your credit score is just one factor banks look at: Before getting too worried about how your credit score could hurt you, understand that it is just one factor that banks consider when you apply for a loan. Employment history, your college degree, and other factors that show you are a credit-worthy person can help.

2. Find a reasonably-priced car: For your first car out of school, get something that is reasonably-priced. Sure, you’d love your dream car right now, but it will still be there in 10 years. For now, choose something you like that also has a reasonable price tag. This will translate into a lower loan amount, which means better chances of getting approved.

3. Save up for your down payment: Anything you can do to increase the amount of your down payment will likewise reduce the amount borrowed – and make the banker want to say yes to your application.

4. Put together a list of bad credit lenders: Some lenders specialize in bad credit individuals. They have sophisticated risk models that take into account more than just your credit score. Be sure to put together a list of at least 5-10 bad credit lenders (more choices = better chance of getting a loan with a good interest rate).

5. Apply to at least 3 lenders: Once you have your list, do some research on each one and then apply to at least 3 – 5 of them. You will be tempted to take the first offer you get, but hold out for an offer with the lowest-possible interest rate: it could save you thousands over the life of the loan.

Follow these 5 tips to get the best-possible loan offer for your new car.

About the Author: Get a list of bad credit lenders with the best rates in your area at:

Best Bad Credit Auto Lenders



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