Paying or receiving child support payments can make it more difficult to qualify for poor credit car loans
What we know
If you have bad credit and are responsible for child support or receive child support income you need to be aware of how this will affect applying for terrible credit auto loans.
We understand these situations because since 1992 we’ve been doing bad credit auto sales here at Auto Credit Express. Our website is even designed so that applicants with poor credit can better understand topics such as repossession and tote the note loans as well as today’s topic, how child support impacts getting approved for a bad credit car loan.
You might have a problem getting approved for a bad credit auto loan if some of your income comes from child support payments. The main reason it’s an issue is because child support income cannot be garnished.
What this means is if someone with child support income has their car repossessed, the lender can’t get a court order to take that income to pay off the loan.
As a result, lenders are especially careful when considering applicants with child support income. But there are at least two situations when bad credit lenders typically might consider someone with this type of income:
1) If the borrower has additional income from a job or other source that can be garnished (the longer the job time and the higher this income, the better the chance for an approval).
2) Contributing factors such as long-term residence stability and “situational” bad credit versus “habitual” bad credit (when poor credit stems from a single issue, such as a medical problem, instead of a history of never paying any bills on time) can also help increase a borrower’s chances.
You’ll also need proof of this child support income. In most cases, copies of the court order or divorce decree stating the amount and length of your payments will need to be provided to the lender.
If you’re required to make child support payments and you’re behind, it’s also difficult to get an approval. The reason is simple: people in this situation tend to change jobs frequently. Often when the court finds them at an employer and begins to garnish their paycheck to cover back payments, they leave and look for another job just to avoid the garnishment.
A judgment for delinquent child support payments will also appear on credit reports. Seeing this information, most bad credit lenders will typically reject an application.
But even in this situation, it’s possible something can be done.
If you have a delinquency but you’ve made arrangements with child services to catch up and you can prove this with written documentation from either child services or the court, then a number of bad credit lenders will still consider your application.
The Bottom Line
Child support income or payment delinquency issues can be a problem with any car loan, but they’re even bigger issue when applying for poor credit car loans. To improve your chances for an approval, be sure to bring the proper documentation with you when you visit the dealer.
You should also know that at Auto Credit Express we specialize in assisting people with bad auto credit find a dealer for their best chance at getting approved auto loans.
So if you really want to get your car credit back on track, you can begin now by filling out our online auto loans application.