NEW YORK (TheStreet) -- Having bad credit -- and these days, lenders see that as any credit score of 660 or lower -- can really crimp your ability to buy a new car.
That said, having bad credit doesn't mean you can't a buy a new car, SUV or truck. It just means you have to be diligent and creative.
According to a report from Edmunds.com, with the right preparation and expectations subprime buyers can secure a new car loan responsibly and even develop smart financial habits to help improve their credit scores for future purchases.
"Contrary to popular belief, there are a number of reasons why a lender would help somebody with a troubled credit history to buy a new car," says Ronald Montoya, consumer advice editor at Edmunds. "If you do your credit homework, shop within your price range and make all of your payments, you'll not only improve your credit score but you'll also practice positive finance habits that will serve you well for years to come."annualcreditreport.com where you can get one free copy of your credit report once a year. It's good to spot so-called "risk factors" such as unpaid debts that you can square away, ultimately hiking your credit score. Do this at least 90 days before you start looking for a car. Get pre-approved. Even though you have toxic credit, that doesn't mean you're out of luck for an auto loan. "Check with your own bank or credit union; it may be more willing to approve you if you already have an existing financial relationship," Edmunds says. Bring "financial ammunition." Your credit may be in the tank, but you can still bring proof you're a good credit risk. "When you apply for financing -- especially at a dealership -- bring proof of improved financial stability," Edmunds says. "These items may include a recent pay stub, a utility bill and a list of personal references." up from 32.8% in Q4 2012.