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Bad Credit and Disability Income

If you have bad credit and you receive disability or SSI income this could make it more difficult for you to qualify for a bad credit auto loan

In our experience

If you have bad credit and all or a portion of your income comes from disability or SSI payments, you may be wondering if there’s a chance you can qualify for a bad credit car loan. We’ve seen this before, because at Auto Credit Express we’ve been working with bad credit customers at the retail level for over two decades and, more recently, on the internet.

An example of our commitment to credit-challenged car buyers includes a web site with a bad credit auto loan application – something we realized was needed after seeing the embarrassment and disappointment which customers with bad credit experience at dealerships that don’t offer second chance auto loans.

And while these people can always visit a tote the note dealer, this doesn’t solve their car credit problems since these dealers usually don’t report loans or loan payments to the credit bureaus, their interest rates are extremely high, and this type of loan usually involves a greater chance of repossession.

But if you have bad credit and all or a portion of your income comes from disability or SSI payments, anyone other than a buy here pay here dealer even consider your application?

Dealing with disability and SSI income

Even if you have good credit, it’s difficult getting approved for a car loan if all or some your income comes from disability or SSI payments. It’s even harder if you have bad credit you’re applying for a bad credit auto loan.

Here’s the reason: disability and SSI income cannot be garnished. This means that if a borrower with disability or SSI income has a vehicle repossessed, the lender cannot go after that particular income source in order to pay off a deficiency loan balance.

Because of this, lenders are especially cautious when considering bad credit applicants with either disability or SSI income. Even so, there are at least two situations in which a typical bad credit lender might consider an applicant with this these sources of income:

•    If the applicant has other income sources that could be garnished, such as W-2 wage income from a job (the longer the job time and the higher this additional income is, the better chance you have of getting approved).
•    Other factors such as long-term residence stability and “situational” as opposed to “habitual” bad credit (where current bad credit stems from a single cause, such as a medical issue, job loss or foreclosure, as opposed to a history of late payments) will also increase your chances of an approval.

One thing to remember: if you are claiming either disability or SSI income, you will need proof. In other words, you will need to provide the lender with a copy the original award letter that stipulates the amount and duration of the support payments. You also may be required to provide additional proof, such as bank statements, that those payments are ongoing.

The Bottom Line

SSI and disability income can be a problem with any auto loan, but both can be an even larger issue if you have bad credit. To improve your chances for an approval, be sure to have the proper documentation with you when you visit the dealer for the first time.

To improve your chances even further, apply online at Auto Credit Express where we specialize in placing customers with bad credit with dealers that can help them.

So if you are serious about getting your car credit back on track, you can begin a new chapter in your life by filling out our bad credit car loan application now.

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