Qualifying for a Car Loan with Poor Credit

Qualifying for a Car Loan with Poor Credit

Unfortunately, credit scores don’t simply get better overnight, and they are constantly changing. Building a solid credit history and score takes time. For those with poor credit that are trying to take out an auto loan, you are fortunately not immediately ineligible for financing. All you need is a lender whose specialty is auto loans for poor credit, what’s known as a subprime lender.

Requirements for Bad Credit Car Loans

Subprime lenders are commonly found at special finance dealerships and this is one of Pensacola Bad Credit Car Loans specialties. We specialize in helping buyers with bad credit, no credit, or bankruptcy finance their car loans. To qualify, you’ll be required to provide certain documents in order to show that you meet their requirements:

  • Income: Subprime lenders typically require an income between $1,500 and $2,000 a month minimum, before taxes, but Pensacola Bad Credit Car Loans has a track record of getting loans for people who make less that, so fill out that application and we’ll do the best we can for you. Providing your last computer generated pay stub with year-to-date earnings—or, if self-employed, recent tax returns—will show proof that you meet the required income.
  • Residency: A recent utility bill in your name for the address on your application is enough to ensure that your listed address is your residence.
  • Phone: Bring in a recent bill from a national phone carrier, with your listed address and name, so that your lender is sure that you can be contacted. Prepaid phones are not acceptable.
  • Identity: To prove your identity, a valid driver’s license is acceptable.
  • Down Payment: If you have poor credit, you could be required to make a down payment. Most subprime lenders ask for at least 10 percent of the vehicle’s selling price or $1,000—choosing the lesser amount—though required amounts can vary and we might be able to work with you and get a car with no down payment at Pensacola Bad Credit Car Loans. Several factors go into making that decision so we need to see what your application looks like.
  • References: Your finance manager is going to ask for personal references, typically between six and eight. These references need names, addresses, and phone numbers. They can be co-workers, friends, or family members not living at your address.
  • Trade-in Info: Ensure you have the title for your old car if you plan on trading in and give it to the dealer. If you are in a title holding state, this need not apply.

Building Credit to Qualify for a Car Loan

It will take some time—especially if starting from the bottom—before you have good credit. Here are five tips to help you get your credit up:

  • Be an authorized user of someone’s credit card – The good credit habits of the account holder benefit authorized users through increased credit scores.
  • Find a cosigner – If you have poor credit or have never before financed a vehicle, a cosigner may be exactly what you need to get your auto loan approved.
  • Get a secured credit card – With a secured credit card, your limit of available credit is based on an amount that you deposit to a separate account.
  • Apply for credit-builder loans – These are loans in which you pay monthly payments into a lender-held account, and on-time payments improve your credit score and help to build credit, since both the payments and the loan are reported to credit bureaus. Once completed, the loan is listed as paid in full, and you receive a check from the lender for the loan amount, with interest.
  • Make payments on time – The single biggest factor dictating your FICO score is payment history, and so long as your bills are paid each month on time, your credit score should improve.

Ready to Start Financing?

Applying for an auto loan and shopping for a new car can be, at the same time, exciting and stressful. The trick to qualifying for an auto loan in spite of your bad credit is finding a subprime lender to work with. It can be difficult to find a dealership that is connected to these lenders, but fear not, Pensacola Bad Credit Car Loans is here.

We work with a network of bad credit car dealers across the nation. Spare a moment to fill out our car loan application form.

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