Consumers with bad credit typically find themselves facing a number of challenges when applying for an auto loan
What we know

For car shoppers with past problem credit or even those with absolutely no auto credit at all (that is, they've never had a car loan) where they decide to apply for one can often mean the difference between a loan approval and a credit denial.

Here at Auto Credit Express we know exactly what these consumers are faced with because we've spent the past twenty years helping car buyers with questionable credit find those franchised new car dealers that can give them their best opportunities for approved car loans.

This leads us into today's topic which is: the problems that car buyers with low FICO scores typically run into when they apply for a loan.

Car loans with no credit

One question we frequently get asked is “how hard is it to get a car loan with no credit?”
In order to answer this, we need to look at the three avenues consumers can typically take in applying for a vehicle loan.


The first option in requesting car credit is to apply directly with a lender. This can be done either by dropping by a bank and submitting an application to a lending officer or by going online to a website if the lender offers that as an option.

Either way will work if you have good credit, but if your FICO scores are below 640 it's usually not that easy.

Traditional lenders such as banks and credit unions typically loan only to either prime or (sometimes) near-prime customers. In some cases applicants with credit problems are advised to not even bother continuing the process once the loan officer has reviewed their credit report. In most cases if they decide to continue, the application eventually gets turned down.

Applying directly with high-risk lenders comes with its own set of problems.

Because nearly all high-risk car lenders have documentation requirements (reviewing paperwork to verify employment and income to name just two) most only lend indirectly through franchised new car dealers. This means that car buyers needing these types of auto loans often find it difficult locating a lender that's willing to take a direct application.

Another problem: since a majority of these lenders work through dealers, even if one is found that is willing to take a direct application, the limited choices involved means that the applicant could end up with a much higher interest rate since this lender does not have to compete with another bank for the loan.


A second choice car buyers have is applying for a car loan indirectly at a dealership. This also works well if the applicant has good credit, since the dealer's rate can be compared with those offered online as well as by other local banks.

But if an applicant's FICO scores are low this raises an entirely different set of problems. Not the least of these issues is that applying at a particular dealer is often a hit-or-miss situation. This is because not all new car dealers are interested in helping customers with credit issues. Some dealers aren't sign up with a single subprime lender.

Targeted web site

Credit-challenged buyers do have a third choice and that is applying online at a web site that caters to people with past credit issues. In this case of

the chances of eventually getting approved depend upon the size of the dealer network as well as how transparent the website is.

To begin with, the bigger the network the better an applicant's chances will be of finding a dealer in their area or at least one that's not too far away.

Transparency has to do with the website itself. Here's what we mean when we say that:

First of all, is the online credit application encrypted, making it secure? Secondly, does the company behind the site belong to the Better Business

Bureau and, if so, what is its reputation? Thirdly, does the site contain a resource section where you can learn about the bad credit car loan process and does it have finance calculators to help you determine, before you apply, if you even meet the basic requirements for qualifying for a loan?

Finally, you'll want to be sure there's a toll free number that will connect you to an in-house customer service representative just in case you have any questions.

In our opinion, if the web site you're considering doesn't offer all these features you might want to consider one that does before submitting your personal information over the internet.

Check us out

Just in case you were wondering we know a web site where you'll find all those features. At Auto Credit Express we specialize in helping applicants with bruised credit find those dealers that can give them their best opportunities for car loan approvals.

So if you're ready to reestablish your car credit, you can begin now by filling out our online car loans application.