When talking about cars the lemon analogy might not seem to be the best but the fact remains that getting turned down for a bad credit auto loan is not the end of the road for many consumers.
Bad credit car loans
At Auto Credit Express, we've spent close to twenty years focusing on consumers with bad credit and helping those customers, who choose our service, raise their FICO scores and reestablish their car credit by financing a vehicle with a bad credit auto loan. Along the way, we try to educate our applicants on the loan process, since these very same consumers can find themselves being turned down for a loan if they don't know how the process works
Reversing a loan decision
The bad credit car loan process is really just another form of negotiation. While many consumers might think that once they are turned down because of bad credit that there is nothing else that can be done, in many cases a turn down only means that the loan was not approved in the form in which it was submitted to the lending institution.
There are a few approval killers for bad credit car loans. And while these are not automatic rejections for all lenders, they are for some and include:
- Applicants currently in credit counseling
- Applicants with a dismissed bankruptcy
- Applicants with a credit history that includes multiple repossessions
- Applications with a credit history that includes multiple bankruptcies
- Applicants with a credit report showing past due child support
- Applicants with a credit report showing excessive tax liens
You have to remember that subprime lenders want to approve your loan application, but the real key is that you, and the deal, have to somehow fit within their approval guidelines. These lenders are used to seeing bad credit, so they place less emphasis on your credit history (other than some of the above mentioned points) and, instead, concentrate on other factors.
Here are four things that you can do to possibly alter a negative credit decision from a subprime lender:
1. Review your credit report. Although the effects of this are usually not immediate, analyze your credit report and notify the credit bureaus, through their correction processes, if you see any errors that might result in a lower credit score. This is why it's so important to request a copy of your reports before applying for a loan.
2. Consider less vehicle. It could be that the car you're looking at fits the lenders parameters, but, in their opinion, is still too expensive considering your credit history, employment stability or residence stability (or other factors). Ask the lender if a less expensive car would help with an approval.
3. More down payment. If you have it, ask the lender if a larger down payment would help your cause. Subprime lenders love borrower equity and a large down payment has been known to cure all kinds of ills.
4. Add a co-signer. Someone living at the same address can add stability if their credit history is as good or better than yours. Their income and debt must also qualify them for the loan because you will both be jointly and individually responsible for the loan.
Auto Credit Express
If you have bad credit, you should know that you probably have more options than you realize, even if you've previously been turned down. Before going to a “buy here pay here lot”, remember that they don't report to the credit bureaus and getting a car there won't help you repair your credit. At Auto Credit Express, we have helped thousands of customers, with good credit and bad credit, buy a new or low mileage used vehicle that is not only reliable, but will help them reestablish good credit. For more information, visit our web site at: www.autocreditexpress.com.