What you need to prove your income and employment history can depend on what type of income you make! If you have poor credit, proving your income and work history are key parts of qualifying for a car loan.
Proving Your Employment for an Auto Loan
When it comes to employment history, many subprime auto lenders that assist borrowers with credit challenges require that you’ve had the same job for around six months to a year. They may also require that you’ve maintained a consistent work history for the last three years, without large gaps between jobs. A large gap is usually classified as longer than 30 days.
Proving your current employment can typically be done with an employment verification letter from your employer. Your credit reports could also prove your work history, since the three credit bureaus – TransUnion, Experian, Equifax – often list your employment history on your individual credit reports along with other personal information.
Lenders vary in their requirements, but, when it comes to proof of income they often require similar documents.
- If you have W-2 income, you typically need your most recent computer-generated check stub(s) from the last 30 days. They must display your year-to-date income.
- Borrowers with 1099 income, which typically includes workers that are self-employed or contract work, may need two to three years of tax returns, and possibly bank statements, as well.
- If you have unearned income such as permanent disability, alimony, or Social Security, you may need award letters proving you're going to receive this for the entirety of the loan term. You’re also likely to need bank statements proving you have access to the income.
With a consistent work history and stable income source, you’re on the right track to qualifying for an auto loan.
What if I Got a New Job?
Lenders care about your work history because not only do they require that you have enough income to repay the loan, but also to see the likelihood of your income continuing throughout the loan term.
If you’ve been with your current employer for less than six months, lenders look at your work history to see how stable your employment has been in the past.
If you’ve been in the same line of work for some time, then a lender may be willing to accept your employment and income. For example, say you’ve been in landscaping for five years, but you accepted another landscaping gig with a new employer about two months ago. Because you stayed in the same niche, the recent job switch may not be enough to knock you out of the running for an auto loan, especially if you transitioned right from one job to the next.
In Need of a Bad Credit Auto Loan?
Even if your income and employment history check all the right boxes for an auto loan, a bad credit score could spoil your vehicle financing opportunities. Here at Auto Credit Express, we’ve been connecting borrowers to special finance dealerships for over 20 years using our nationwide network of dealers.
To get matched to a dealership in your local area, fill out our free auto loan request form. There’s never a fee or obligation to buy if you’re connected to a dealer, so get started today!