I'll ignore the dare and go straight to the truth – not everyone gets approved for a bad credit car loan and here's why…
Why Can't I Get a Car?
Here at Auto Credit Express, we recently received a response to one of our articles, and it went something like this:
“I have bad credit and I have been trying to get a car for awhile. Every dealer that I've been to wants a big down payment or they can't help me. If that's the case, why do they say no one gets turned down?”
Not Everybody Qualifies for a Loan
As a case in point, our website, www.autocreditexpress.com, lists some basic requirements on the first page:
- You must gross at least $1,500 in monthly income if your FICO credit score is around 625 or lower.
- All bankruptcies must be discharged. Some lenders will consider a Chapter 13 bankruptcy that's two-thirds completed with an order to incur additional debt.
- No repossessions in the last year, unless included in a bankruptcy.
- Loans are for automobile purchases from our authorized licensed dealer partners.
- U.S. residents at least 18 years of age.
If you can't pass these auto loan requirements, chances are you won't qualify. However, just because you meet these requirements doesn't guarantee that you'll get approved.
Lenders also look at your debt to income ratio. If your monthly bills exceed 45% to 50% of your monthly income, then most lenders won't allow you to take on additional debt. Lenders also consider payment to income ratio. Most lenders won't allow your car payment to exceed 15% to 20% of your monthly income.
Lenders also look at the source of your income. If you're a W-2 employee with multiple years at the same job, this works in your favor. If you're self-employed or have less than a year on the job, getting a lender to approve your application could prove to be more difficult.
If I Don't Get Approved Now, Will I Ever Get Approved?
Many credit situations are temporary. Not enough time on the job can be cured by – you guessed it – more time on the job. Debt to income problems can be solved with either less debt (paying off some of your bills) or more income (changing jobs or getting a raise).
Self-employment issues can be resolved with better record keeping and having a tax professional prepare your income taxes. What's holding you back now could change in six months or a year.
Auto Credit Express Won't Make Empty Promises
Here at Auto Credit Express, we never mislead our customers by using phrases like “guaranteed approval.” We have helped hundreds of thousands of customers with bad credit get either a new or used car through our affiliate dealers.
We do this by being up front about the bad credit buying process, and by furnishing our customers with the tools – loan calculators and online resources – to make informed choices. When you're ready, you can fill out the auto loan request form on our website, and we'll work to match you with a dealer near you.
As always, if you have any questions that our website can't answer, feel free to contact us via phone at 866-902-4403 or through our contact page. Remember, here at Auto Credit Express, we want you on the road to better credit!