Married car shoppers that face a situation in which one of them has poor credit should know what their rights are before applying for an auto loan
If either you or your spouse has bad credit and that person plans on applying for a car loan, you both should be aware of how lenders must view your marital status.
Here at Auto Credit Express we understand this topic isn't always touched upon, but we believe that car buyers, including those with questionable credit, should understand their rights before they apply for an auto loan. That's because we've spent the past two decades helping applicants with problem credit find those new car dealers that can help them arrange for car loan approvals.
So to at least partially address the issue of how to buy a car with no credit and no cosigner, today we'll be taking a look at applying for an auto loan if you're married and either you or your spouse has less than perfect credit.
How your marital status fits into the auto loan equation
Since, for many applicants, the poor credit car loan process is something they're unfamiliar with, they sometimes check with us to see if their marital status will affect their application for car credit. In fact, whether you're married or not married shouldn't be an issue because there's a law covering this very topic.
Repaying a car loan
The Equal Credit Opportunity Act (ECOA) states that creditors can only judge applicants on their ability to repay a debt – nothing else. Lenders, in fact, can be penalized if this rule is ignored.
Not too long ago a ruling by the Justice Department had this to say regarding Compass Bank of Alabama and their failure to follow this law:
"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."
Assistant Attorney General Wan J. Kim had this comment about the court's decision: "Under the law, marital status should have no effect on an individual's access to credit…"
Marriage and interest rates
The ruling upholds the fact that lenders are not allowed to ask you if you are married when you apply as an individual for a car loan.
Furthermore, if you apply for a loan as a couple, and unless you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas or Washington), the lender, if permitted, can only ask if you are married, unmarried or divorced. A lender also cannot charge you a higher interest rate if you are unmarried.
As we see it
Auto loan applicants, even those with bruised credit, should be aware of their rights as they relate to their marital status in applying for loan.
One more thing car shoppers should be aware of: at Auto Credit Express we match applicants that have experienced car credit problems with dealers that can offer them their best chances for approved car loans.
So if you're ready to establish your auto credit, you can begin now by filling out our online car loans application.