If you have bad credit and plan on buying a car there are a few documents you will most likely need when you close your loan at the dealership. These documents are commonly referred to as lender STIPs (stipulations).

Auto finance companies and lenders use STIPs to verify the data on your credit application such as income, phone number, and address (if you have bad credit you will have to prove the accuracy of every item on the car loan application).

Common STIPs needed to buy a car with bad credit:

Pay Stub
For normal W2 employees, a pay stub is usually enough to verify the income stated on the car loan application. If overtime wages make up a significant part of your income, the finance company may also request your W2 from the previous year.

W2 Form
W2 forms are requested to prove overtime income, especially if you are buying a car during the first four months of the year. After that, the Year to Date income on your pay stub is used to verify overtime income.
If you receive hand written pay stubs, lenders often ask for a W2 form.

Tax Returns
If you’re self employed, lenders require the last two years’ tax returns. These tax returns have to be completed by professional tax service. This makes buying a car with bad credit tough if you’re self employed for less than 3 years.

Bank Statements
The auto finance company will rarely ask for bank statements. Sometimes they are requested if you have hand written pay stubs or are self employed.

Telephone and Utility Bills
Utility bills are used to verify your address and phone number. If none of the bills are in your name, chances are the lender will still request the telephone bill to verify the phone number at your address. Other bills, such as credit card and bank statements, can also be used to verify your address as long as the bill is dated within 30 days of the date you buy your car.

References
Plan on jotting down 4 to 6 references. These can include friends, family, co-workers, and employers.

Landlord
If you are renting, the auto finance company will require the phone number of your land lord. Make sure you are current on your rent payment before buying the car. If this is not the case, the lender may decline the loan.

If you have bad credit and plan on buying a car, you may want to gather the above documents and keep them handy; chances are you will need them when you close your auto loan at the dealership.