I'm a recent college grad. Due to some stupid things I did during my masters, I have a bad credit with 3 missed payments on my account and 2 collections. I got a job recently with a six figure salary in Raleigh, NC. I don't have any student loans. I recently went through some websites and got to know that it is kinda hard for a person with bad credit to get a loan approved. I need a car very badly as the new place doesn't have much transport options and I'm going to stay alone in a studio apartment. Will showing my offer letter with salary help in getting a loan approved? I don't want to try with random lenders and hurt my credit score. I need some suggestions from you guys regarding this.

Thanks a lot in advance!

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    Do you have money for a down payment? Can you wait to get a car until you have a few paychecks? – Hart CO Feb 3 at 4:35
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    Buy a junker for cash, then put what you would have made in payments into savings until you can afford the more expensive car. – pojo-guy Feb 3 at 21:48
  • Sounds like you need a car, but you want to buy more car than you can afford. – D Stanley Feb 4 at 14:29
  • @BobbyScon, & Anyon Thanks a lot for your suggestion and everybody who commented on this post. I'm not looking for anything fancy right now. A basic and a neat used car will do just fine. I was thinking of a used car below $20,000. As per the public transport, it takes me an hour to get to my office from home which involves a lot of walking compared to 15 min of drive by car. I feel that the option of renting a car on a monthly basis is a better option for 3-4 months. I could pay off my credit card debt and collections in the mean time and then try looking for a decent car. Thanks again for ev – miketouhey Feb 4 at 19:04
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    I'm inclined to agree with pojo-guy and D Stanley above. $20K buys you a lot of used car. Really, consider instead something in the $5K range, $10K tops. It will rattle, it will be worn, it might well have a few dents and scratches, but it will get you from point A to point B reasonably reliably, which sounds like it's what you actually have a reasonable need for at this point. You can replace it once you have a solid income record, either to show lenders or to buy cash, or a combination (large down payment), if you want to do so at that point. – a CVn Feb 5 at 13:31

Yes, showing your offer letter can help you get a loan, from both credit unions and dealers. It's especially useful as a way to provide evidence of a raised income for someone who already has decent credit. Some lenders will require seeing a couple of pay stubs, while others can be satisfied seeing the offer letter before employment starts. Of course, given your credit history they'd likely be on the cautious side - which might mean rejection or unfavorable terms.

You probably do have some options though. If you can get by on public transport for a while, try to do that. If, as you say, the local transport options are awful, think about getting a beater off Craigslist or something. It doesn't need to last you more than a few paychecks. Borrow from family if you need to. Or see if you can carpool with a friend or a colleague. If that's also not an option, try a good credit union first. They're probably more likely to reject you than a predatory "bad credit welcome" dealer, but they often have an interest in helping their members improve their economic situation, and might be willing to take a chance on you and a small used car loan. If all this fails and you get desperate, well, that's not a good negotiation situation to be in...

As for trying with random lenders and hurting your credit score, multiple hard inquiries in a short time span typically get grouped. So shopping around won't hurt your score much, if you do all the shopping around at the same time. Still, there are many pre-approval lenders (including credit unions) that can do a soft inquiry and give you an idea about whether you're likely to get a final approval or not. Maybe start with those to get an idea about it, as it shouldn't hurt your credit score at all.

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    I think the most important part from this answer is "getting a beater off Craigslist or something". There is no reason to try and rush into getting a loan for a car before putting in the proper time to research options and get a paycheck or 3 under your belt. Heck, you could even rent a compact car for a month. Wouldn't be cheap, but would put you in a much better position for proving you'll have the income necessary to cover it. – BobbyScon Feb 3 at 15:56
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    @BobbyScon: And once you've gotten that Craigslist "beater", you may well find that you don't really need another vehicle, or the associated loans & payments. FWIW, two of my current three came from Craigslist, the third from eBay. – jamesqf Feb 3 at 17:30

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