Examining what it takes in terms of credit history to qualify for a high-risk car loan

Can I Qualify For A Car Loan With Bad Credit?

Qualifying for a Car Loan with Poor Credit

Having spent more than twenty years in the subprime lending field, here at Auto Credit Express we have a general idea of what most lenders are looking for in terms of general qualifications when it comes to car loans for bad credit people.

We previously looked at finding a lender as well as the income guidelines the majority of lenders follow, while today we're going to go over the bane of people applying with no credit history: time in the bureau.

Time In The Bureau

Lenders refer to it as "time in the bureau" which simply means the length of time an individual's credit history has been monitored by the credit reporting agencies (CRA). In this case, we mean one of the big three – Equifax, Experian and TransUnion.

All three bureaus regularly receive information from lenders (such as banks and credit card companies) as well as other entities (such as wireless providers and utility companies). This information is usually kept on file for seven years (in the case of bankruptcies, the time frame is ten years).

Most high-risk lenders require an applicant to have a minimum of at least three years of credit history, which is why the bar is higher for those applying for an auto loan with no credit history. There are, however, other factors that come into play such as income, or job and residence stability that can offset a short time in the bureau. At the same time, though, having little or no credit history (what lenders call a "credit ghost") will typically result in an automatic credit decline.

One more thing: something most lenders consider a plus is having at least one prior auto loan – either successfully completed or current - that shows up on a credit report.

The Bottom Line

Subprime lenders typically require applicants to have at least three years of credit history, while they will automatically decline anyone who is considered a "credit ghost."

One more hint: car buyers with past credit problems should check out Auto Credit Express, where we match applicants with those dealers who work with troubled credit that can offer them their best opportunities for auto loan approvals.

So if you find yourself in this position and you're ready to take that first step towards reestablishing your credit, we invite you to fill out our online car loan application.