Anyone who has bad credit knows that it’s extremely tough to secure an auto loan. No one, it seems, wants to help you out. But while that situation was true for the past couple of years as the country struggled through recession, the times are changing. Bad credit? Banks more willing to lend now – and that’s good news for consumers with less-than-stellar credit history.

The good news comes via the FICO (Fair Isaac Corporation) quarterly survey of bank risk professionals.  According to the survey, lenders said they expected an increase in car loan availability for consumers with bad credit.

Such consumers, generally referred to as subprime borrowers, stand to gain. More than 50 percent of the FICO survey respondents said they expected the auto sector to see the largest increase in borrowing to those with bad credit.

Why the expected increase? The survey, conducted for FICO by Professional Risk Managers’ International Association (PRIMA), found that respondents expected delinquency rates to remain flat or decline on most types of loans. That indicates that consumers are regaining their credit health.

According to Dr. Andrew Jennings, chief analytics officer at FICO and head of the FICO Labs, “We are clearly seeing a loosening of credit in the auto finance market, with lenders responding to increased consumer demand.” Dr. Jennings went on to say, “This is good news for car dealers and should help the auto sector continue its recovery.”

The fact that auto delinquencies are low and are expected to remain low is another positive sign for those with bad credit seeking auto loans. As Dr. Jennings told Automotive News, “In the payment hierarchy, for people who have to choose among credit card, mortgage or auto loan, the auto loan is one of the last things to get into trouble.”

So, if you have bad credit and need to secure a car loan, now may be your best time yet to go out looking. But do a little prep work ahead of time, say three to six months or so. Clean up past-due payments and make all bill payments on time. While getting credit is primary, you also want to get the best financing rates possible – and those only go to those with good to excellent credit. Maybe you have a ways to go, but don’t get discouraged. If you institute good payment habits now, your credit will continue to improve so that the next time you need credit, you’ll be in an even better position.

As the old saying goes, you have to start somewhere. And now may just be that time for you.

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