Purchasing a car can be a stressful experience for anyone. Besides a house, this is probably the largest purchase you will ever make. Not many of us can make this large purchase with cash. And as we all know, the most stressful part of the process is waiting to find out if you meet the criteria to be approved for your car loan.

If you're like me, perhaps you have been late on a credit card payment, or have a past due cell phone bill. Statistics have shown that a very large percentage of people in the United States have less-than-perfect. As you're well aware, these late payments and collections accounts are placed on your credit report.  The three major credit reporting agencies then use all of your information to formulate a credit score.  This is what the dealer will use to determine whether or not they can grant you financing.

Before I worked as a salesman and finance manager in the automotive, I was convinced that if I got turned down at one dealership, then I would be turned down everywhere.  Fortunately, for those of us with poor credit, this is not always the case.  For many people in this situation, a little extra time and research can set you back on the path to car ownership.  I have listed some of the best things you can do below.

Get a copy of your credit report. This is very important.  You can request a copy from any, or from all three of the credit reporting agencies.  Recently, a law was passed that allows you to get one free copy of your credit report annually.  Go over your report with a fine-toothed comb.  If there are any mistakes, such as inaccurate addresses, accounts, etc., dispute the information with the credit reporting agency.  They will have to prove their validity, or remove the inaccurate information.  This can have a significant effect on your credit score.  Speaking of credit scores...

Know your credit score in advance. It used to be that it was hard for an individual to gain access to his credit score.  It is now possible for anyone to get access to this vital piece of information.  This is information that can also be obtained from the three credit reporting agencies.

Do not finance through the dealer. Dealers are known for adding a point or two to interest rates that they have received from banks.  This is pure profit for them.  Say they get you approved at 5%, but they tell you it's 7%, that's an extra 2% that goes directly to them.  When you consider the price of a new car these days, that's a considerable amount of money.  With this in mind...

Shop around. Go to your local banks and credit unions, or check online to see what type of financing you can qualify for.  Many times you can be pre-approved for a specific amount at a specific rate.  Having this knowledge before you start shopping will be a huge weight off your back.  It will also give you more control over the purchasing process.  The dealer will no longer be able to pressure you into the deal this is most advantageous for himself.

Start working on your poor credit. I know what you're thinking...it's easier said than done.  But if we ever want to get out of the "subprime" market, it's something we have to focus on.  With bad credit, you can count on paying a higher interest rate on your new car purchase.  Sometimes this higher rate can amount to thousands of dollars of extra interest over the life of the loan.  If you are in dire need of transportation, you may have to settle for the higher rate this time.  But with some work on improving your credit score, maybe next time around you will be able to secure a much better rate.

Don't make your situation worse. Whatever your circumstances, don't make a decision that will make your credit situation worse.  Do not allow a finance manager to pressure you into taking on a payment you know you cannot afford.  If you have 3000 or 4000 dollars for a down payment, but the car you want is still going to burden you with large monthly payments, you may want to consider spending that money on a quality used car.

You certainly don't need me to tell you that securing a car loan with bad credit is difficult.  However, if you can follow some of the tips I've given you, and get working on that credit score, it is definitely not an impossible situation.  Good luck in your search for affordable transportation!