What you can expect during the process of applying for an auto loan if your FICO scores are low
The Car Loan Process with Poor Credit
How we know

We have found that car buyers with credit issues usually don't know what happens next once they've received an auto loan approval.

We've been through this with applicants before. That's because here at Auto Credit Express for the past two decades we've been helping car buyers with low credit scores find dealers that can arrange for car loan approvals while helping them understand the bad credit auto loans process.

After you apply

Once you've been contacted by a dealer and set an appointment to come in, the first thing you'll notice that's different is that you won't pick out a car right away. Instead, you'll be interviewed by someone in the finance department.

Once this is complete, your credit application will be sent to those lenders that fit your credit profile. Following this, the finance manager will usually wait until he or she receives an approval from the lender before you're shown any vehicles.

Here's why:

Your budget

Lenders will first check your pay stubs for income amount verification. You may also need to prove job time, work and income history with W-2s from previous years. Income sources such as child support or disability typically need to be validated with court orders, determination letters and possibly even bank statements.

The lender then examines your expenses and computes a payment range you can afford using your monthly debts while also factoring in car insurance costs.

Credit level

During the approval process, the lender will typically place car loan approvals in a specific program tier based on credit scores as well as additional factors such as job and residence stability as well as previous bill payment history.

The tier will dictate such things as the interest rate, contract term and down payment needed.

This information is then sent back to the dealer.


After receiving this information, the finance manager will then determine which cars in inventory meet the lender's requirements. For example, with most subprime lender programs the newer the car and the lower the mileage, the longer the loan term allowed. In some cases, newer vehicles also qualify for lower interest rates.

Vehicle problems

This is usually when problems can crop up. Many customers pick a car beforehand based on what they want – such as a 5 year old pickup that has 70,000 miles. Even if it's in good shape and drives nicely, based on its age and mileage the loan term may be too short and the available interest rate may also be higher.

In other words, despite the fact that it's a good vehicle, the resulting payment may not fit into the budget set by the lender so it comes down to choosing a different vehicle.

As we see it

With a basic understanding of the loan process, auto loan applicants with poor credit can avoid many of the problem issues - including choosing the wrong vehicle.  Remember, the goal is to establish your car credit, not finance your dream vehicle.

One more thing to keep in mind: if you've had past credit problems, Auto Credit Express can help you find a dealer for your best chance at auto loan approvals.

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