Bad Credit Auto Loans and Tying the Knot
by Steve Cypher on Thursday, June 17th, 2010Credit challenged consumers may be wondering whether being married helps when it comes to applying for car loans with bad credit.
The alternatives
If you’re reading this, there’s a good chance that you have bad credit and you need a car loan. And even before we get into today’s topic, I should mention that if you’re serious about reestablishing your auto credit, Auto Credit Express can help you. By filling out the online auto loans for bad credit loan application there is a good chance that you can begin a new chapter in your life by getting approved at one of our affiliate dealers for a bad credit car loan. You will then be on the way to raising your FICO scores and re-establishing your car credit.
The alternative – buying a vehicle from a Tote the Note, We Finance Everyone car dealer – can be a problem because these dealers don’t report your payment history to any of the credit bureaus. On the other hand, taking out a second chance auto loan with a bad credit lender and choosing a vehicle that’s too expensive can also create problems since this can stretch your budget and even result in repossession. Once this happens, rebuilding your auto credit has to be put on hold for at least a year, since most bad credit auto loan lenders will only consider applicants with a repossession that’s more than a year old.
The basics
But when it comes to auto loans for bad credit, it’s always good to get back to the basics. Today, that means discussing the relationship between your marital status and bad credit car loans. But there really is no discussion at all as it turns out that it doesn’t matter if you have a marriage certificate or not. In fact, there’s a federal law that covers this very topic.
The Equal Credit Opportunity Act
The Equal Credit Opportunity Act, or ECOA, basically states that a creditor, such as a bank or other type of lender, can judge a customer only on their ability to repay a debt and not on any other factors. One recent example of a lender failing to follow the rules culminated in a settlement between the Justice Department and Compass Bank of Alabama. According to a Justice Department release:
“The government’s complaint alleges that Compass Bank violated the Equal Credit Opportunity Act, which makes it unlawful for any creditor to discriminate against any applicant based on race, color, religion, national origin, sex, marital status or age by unlawfully charging higher interest rates to co-applicants for automobile loans who were not married to each other than to co-applicants who were married.”
The implications for bad credit auto loan applicants
Assistant Attorney General Wan J. Kim had this to say about the court’s decision: “Under the law, marital status should have no effect on an individual’s access to credit…” This means that a lender is not allowed to ask you if you are married or not when you, as an individual, apply for a loan. It also means that if you apply for a loan as a couple, unless you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas or Washington), the creditor, if permitted, can only ask if you are married, unmarried or divorced. Finally, the creditor cannot charge you a higher interest rate if you are unmarried.
As we see it
At Auto Credit Express we want you to know your rights when it comes to applying for a bad credit car loan. And at the same time, if you are serious about reestablishing your car credit, following the wrong advice will not help you. Instead, we suggest visiting www.autocreditexpress.com and going to the resources section to find the right answers to your questions.
You should also know that through our affiliate dealers we have helped thousands of people with bad credit get a new or reliable low mileage used car. More importantly, the car loans with bad credit that finance these vehicles have started these people “on the road” to renewing their auto credit and establishing a good credit history.
Fill out an application
So why not begin the process right now by filling out our secure online bad credit car loan application to see what we can do for you.
Tags: auto credit, bad credit, car credit, credit, ecoa, equal credit opportunity act, fico, FICO score, fico scores, repossession, tote the note
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My wife and i have been in bankruptcy for several years and we are almost done.We only have to go until August or September at the latest. We are paying back 100%. The problem is her engine just blew on her 2000 Oldsmobile Alero. She need a vehicle badly to get back and forth to work.I had to find a car in 2008 and was able to find on threw a very bad court process. My car loan is paid thou our court.Is there any way that you could help her to obtain a new car.Our lawyer is useless when it comes to helping us. Sincerly Maurice Lightfoot
Mr. Lightfoot,
Unfortunately, most national lenders will require an order to incur additional debt (through the “very bad court process” you mentioned) before they will approve a car loan, even though your bankruptcy is almost finished. There is one lender, Friendly Finance, that might be able to help you. Unfortunately, this lender only works through car dealers, so you will need to start calling around to see which dealers in your area do business with them. But even then, there is no guarantee that you will get approved (but it is still your best shot at this point).
The alternative is to approach the buy here pay here dealers in your area to see if one of them can help you out.