It's 'buyer beware' on subprime loans
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"A modest amount, 20 to 30 points, could reduce how much they are charged," says Fishbein.

Third, pull your report and make sure your score reflects your true credit history. "A lot of times people fall into subprime category because information on their credit report is not correct and is depressing their credit scores," says Norma Garcia, a senior attorney for Consumers Union. "Make sure it's consistent and accurate."

Full steam ahead
If waiting to boost your score is impractical and everyone seems to see you as subprime, then you want to shop carefully. Some lenders will treat you the same as a prime customer. Others will assume that if your credit's blemished, you aren't that good with managing money and may not read the fine print. And some will assume that if you're not good with money, you're a bigger risk for them.

But if you're getting a subprime loan, it's even more important to read the fine print. If you've had money trouble in the past, you want to be extra careful not to sign anything that will cause more problems.

Subprime borrowers expect to pay higher APRs, so it pays to compare. And it's the terms that make it subprime, not the lending institution. So don't let the name on the door fool you.

"Just because you have a traditional or prime loan from a lender doesn't mean you can't get a subprime product from the same lender," says Manning. "People tend to get lulled into complacency that they won't get ripped off."

You also need to look out for something that sounds too perfect. "If an offer sounds too good to be true, it is," says Manning. "If you know that you're getting 22 percent rates on credit cards, and all of a sudden you're getting a zero-percent credit card, run. It means you're going to be getting a lot of fees."

If you're shopping for a home or auto loan, ask about any and all fees upfront. If there seem to be a number of them, that's not a good sign. Your credit score means the lender could have a slightly higher risk in making the loan. But the cost of filling out the paperwork shouldn't change. Shop around.

Limit your risk
Lenders are all about limiting their risks. You've got to do the same. Terms that may be benign for prime borrowers can sound the financial death knell for some subprime customers.

Avoid balloon payments and prepayment penalties. Balloons set up a financial crisis. If you can't make the cash, you're out of luck.

Prepayment penalties punish you for improving your finances. If you take a subprime now, but your situation is improving and in two years you qualify for prime, you have to pay the penalty to your old lender.

For subprime borrowers, these clauses can often become more than paperwork details.

Balloon payments increase the likelihood of default by 46 percent, according to Michael Stegman, professor of public policy and director of the Center for Community Capitalism at The University of North Carolina at Chapel Hill, who conducted a recent study of subprime mortgage refinance loans. Prepayment penalties will raise the odds by 15 percent to 20 percent, depending on the terms.

But what tends to hurt subprime refinancers the most? Adjustable-rate mortgages, says Stegman. In his study, adjustable-rate refinance borrowers had a 49 percent greater chance of losing the home in foreclosure.