Story brought to you by Savvy.
Did you know the average credit score in Australia is 658 out of 1000? Equifax, a credit reporting bureau showed the average was 757 in 2016. The 2016 report showed that 17pc are considered at-risk of default - which places them into the bad credit category.
If you need a car and have below average credit, there are methods to obtain bad credit car finance.
Here are some tips from the experts so you can get behind the wheel of a vehicle sooner.
Accept you have bad credit and work up from there
If you suspect you have bad credit, it is worth checking your credit history with a credit reporting bureau such as Equifax, Experian, or illion. You're entitled to one free credit report per year.
If your credit report contains errors, you can work to clear them with the bureau. If it is what it is, you need to consider your financial situation.
"A bad credit car loan is not impossible to take out, but you will be paying far more in interest compared to a mainstream car loan," Savvy Managing Director Bill Tsouvalas said.
"But you need to temper your expectations a bit. You need to figure out what you can afford by using a car loan repayment calculator."
To use a car loan calculator, you need to know the loan term, interest rate (preferably the comparison rate), and the amount you intend to borrow. This will give you an approximate figure of how much your repayments will be each month.
Can you pay off other debts first?
If you already have high amounts of debt against you, push harder to try clearing those debts before getting quotes for a bad credit car loan. If you have many smaller debts, such as credit cards, it might be worth your while to consolidate them first.
If you aren't in debt, saving up for a deposit goes a long way with lenders to show you're a lower risk.
Prove you're creditworthy by other means
Lenders and banks will check your credit score first to determine your ability to pay back a loan - your creditworthiness. But it's not the only metric they use to figure this out. You can boost your creditworthiness by proving you're a safe bet.
You should gather as many pay slips, tax returns, proof of address, bank statements to show you have an income, good residential status and savings and/or you're making real efforts to pay off outstanding debts. This may give lenders pause for thought and show you're a lower risk than your credit score makes you out to be - and you'll be rewarded for your hard work with a more competitive rate.
"Honesty is your best policy," Mr Tsouvalas said.
"Thousands of people have bad credit for one reason or another. But everyone deserves a second chance, and lenders would rather lend than not. Don't be coy with your finances - it'll come back to bite you."
Quote often, apply once
When a lender or finance company conducts a formal credit check, it is recorded on your credit history. The more credit checks you get, the worse it looks.
"That's because it seems like you're in need of money fast, which raises a lot of red flags," Mr Tsouvalas said.
"Get as many quotes as you want, but don't consent to a credit check - and you have to say yes before a bank or lender can do one - that can make your credit score even worse."
A broker can give you many different quotes based on a "soft credit check" - a check that doesn't get recorded on your history.
"When you've established yourself as a good borrower, your credit score actually goes up over time. So, there may be some short term pain but long term gain," Mr Tsouvalas said.
Remember to consult a financial professional before taking out any kind of credit.
Story brought to you by Savvy.