Is It OK to Pay Higher Interest Rate Because of Bad Credit?

It is not a secret for consumers that people with bad credit are typically charged a higher interest rate for financing. However, a large percentage of consumers are not even informed what their credit report looks like.

Car dealers know this and use to scam consumers. Of course, there are many dealerships that deal honestly with customers. But some dealerships will defraud customers by telling them that their credit is terrible.

What consumers don’t know is that the interest rates are not always based on their credit score. There have been cases when people with good credit have paid more.

You can protect yourself from dealer fraud if you follow these steps when financing a vehicle through a dealership:

  1. First of all, go through your budget. Write down your expenses and determine what you can afford.
  2.  Sometimes local banks and credit unions may offer competitive rates that are much lower than at dealerships. It’s a good idea to compare financing rates.
  3. Remember that interest rates are negotiable and feel free to negotiate.
  4. Before you go the dealership get a copy of your credit report. Know exactly how much is your score and your credit history.
  5. If the dealership makes any statements about your credit that you believe are questionable, ask to see your credit report.