A significant number of Americans have had some sort of credit problem.  These problems come in many shapes and sizes.  From unforeseen medical problems to lost jobs to someone stealing your identity to bankruptcy, they can ruin your credit.

Some who have not run into these problems may think these are bad people with lots of problems, but what I have found is that bad things happen to good people.  Folks who have run into credit problems want to get back on their feet and re-establish their credit.  Their problem is they don’t know how and unfortunately there are a lot of people out there trying to take advantage of them in their time of need.  One thing that most people need is transportation.  This transportation can not only be the key to getting back and forth to work, but it can be the answer to re-establishing your credit.  How you might ask?  Well, it's simple - you make your car payments on time, the finance company reports to the credit bureau and your credit score will improve.  Your credit score may improve so much that you will be able to obtain conventional financing the next time you purchase a car.

There are many things that go into your credit score and how people view your credit, but one of the things you can control is setting yourself up for success in re-establishing your credit.  Let’s take a look at how to get a car loan and re-establish your credit:

1. Know your credit score
1. Great credit: 750 and above
2. Good credit: 675 – 749
3. Fair credit: 625 – 674
4. Less than perfect credit: 624 and below
2. Have realistic expectations.  If you have less than perfect credit it will be difficult for you to get that brand new car you want today.  Focus on obtaining the credit you need today with reliable transportation, both of which will help you to re-establish your credit.  If you have good or great credit you should be able to obtain a conventional loan through a car dealer.
3. Come prepared.  There will be some documentation you need to bring with you.  Driver’s license, phone bill and recent pay stubs to name a few.  The more information you have the better, like bank statements and other utility bills.
4. Be ready to discuss your credit problems.  Ensure that you tell the person trying to help you everything you can.  They are on your side and want to help you obtain the financing from the finance company.  The more they know the more they can help you.
5. You will need a down payment.  The more down payment you have the better the vehicle you will be able to obtain.  Please understand that you will need to have a vested interest in the car you are about to finance.
6. Make sure you can afford the payment.  Don’t get caught up in getting a “better” car if you can’t afford it.  The best car is one that you will be able to afford every month and will allow you to re-establish your credit.
7. A warranty may be a good idea.  As long as it does not put your payment out of reach warranties are usually a good idea.  Make sure the warranty only covers major mechanical breakdowns, like engine and transmission.  It should cover things that you may not be able to afford if they break.
8. You probably don’t need other insurances.  Really take a look at whether you need credit life or unemployment insurance.
9. Don’t finance the car longer than it will last.  Make sure the term of your loan is not longer than what you think the car will last.
10. Lastly, make your payments on time.  This is the only way to improve your credit score.

Good luck and make sure you make those payments on time.