"I just got turned down by another lender! I am so excited!" said no one, ever. Let's face it: being turned away for a loan is disappointing, especially when you really need it. And if you need a car, chances are it is an urgent situation and probably needs to be taken care of fast.
So, for some reason or another, you are unable to meet at least one of the lender's requirements for approval. This could be for a variety of reasons: your credit history, financial situation or employment. In any case, there are things you can do to remedy these situations so you can get back on track.
Turning Around the Turn Down
The team here at Auto Credit Express wants to help you achieve your auto financing goals. In order to do that, you need to know more about why you were turned down, and how we can help you get approved next time.
- Your debt to income ratio (DTI) is too high. It's not just about how much you make, but how you use it. If you have too many other expenses on your plate, a lender will not take the risk of giving you a loan you cannot afford.
- Poor credit. If you have unpaid bills, a bankruptcy or a repossession on your credit record, this negative credit history will heavily affect your chances for approval. All of these show a lender a trend of financial irresponsibility on your part.
- Not enough time employed. A good, solid job history is something lenders like to see in a borrower. If you have a highly varied job history with lots of gaps in between, it tells the lender that you have no stability to pay your loan.
- Not enough time at your residence. Everyone moves from time to time. It's only natural. But just as with your job history, if you can't show any signs of being stable, lenders will not feel comfortable dealing with you.
- Lack of a Down Payment. While zero down auto financing options are available, you usually need stellar credit to qualify for one. So, for many, a down payment is required. Without it, getting approved for financing can become problematic. Just remember that if you have a vehicle currently, you can always use that as part of a down payment.
- No cosigner. A lot – but not all – approval issues can be solved by having a cosigner for your car loan. This step would reassure the lender that the loan would be repaid. Of course, not everyone knows someone who is willing to take the risk of acquiring a debt they shouldn't have to ever be responsible for.
Now, while there is no "one size fits all" solution, you can solve a lot of your credit issues by analyzing your credit reports and paying down your debt. In regards to employment and residence issues, perhaps all you need to do is get more time under your belt.
And when it comes to your income, once you have either paid down your existing debt or you get a raise, you can try to apply again. Another approach is to try and get a lower priced vehicle.
There Is a Place You Can Go
It's best for you to try and rectify as many of these issues as you can before you apply for another auto loan. But, we know that there are times where you simply can't wait for the changes to take effect. That's where we come in. If you have been denied a car loan for any of these reasons, we might be able to help you. It only takes three minutes of your time to fill out the easy online application. Start turning things around today!