FederalAutoLoan.com is all about helping you get the loan you want for the car or truck you need. Our national network of lenders and dealers are experts in helping people with less than perfect credit get a car and the financing to enable you to buy it. But perhaps you’re uncertain whether or not you can qualify for a loan. Well the fact is that there are things you can do to help improve your chances of qualifying for a car loan. And while the list below is by no means exhaustive, it does give you some good ideas on how to improve your chances of getting a loan approval – even a bad credit car loan.
- Have a stable employment record – and be employed when you apply.
Think about it… if you were a lender, would you rather lend to a person who hops from job to job or one who has a good record of employment with only a handful of employers over time? The answer is obviously the stable person. So if you have a job right now, do your best to keep it. In addition, it goes without saying that applying for a loan when you are not employed is probably not a very good idea unless you have a very extensive list of assets. And even then, being unemployed will probably stand against you.
- Be on the job for at least six months… and a year is better.
Along with stable employment, lenders also like it when people have been on the job for at least six months (and a year is preferable). So if you have only been on the job for a short while, you may want to wait a bit to apply.
- Cut the debt.
Unlike our government, you can’t borrow indefinitely. And lenders don’t like big debt loads. So if you have some capacity, consider cutting some of your debt load by paying off some of those loans. You’ll also do yourself a favor if you can pay off the high interest rate loans first. They are probably costing you a lot of money.
- Have a stable living situation as well.
Lenders prefer borrowers who have lived in the same place for at least six months, and, like employment, they prefer at least a year. So if you just moved, you may want to hold off on applying for a car loan until you’ve got at least six months under your belt.
- A mortgage can help you with your auto loan.
Though it seems counterintuitive, having a home loan with a good record of paying your mortgage on time can help you get your vehicle loan. The reason is because lenders like people who make their payments on time and if you have a good record with paying your mortgage payments, it indicated that you’ll also be good at paying your car payments on time as well.
- Close your unused credit and charge accounts.
Unused, open credit charge accounts (be they credit cards or open lines or others) actually work against you even if they are completely paid off. So close them if you have them. There is one caveat to this, however, don’t close your oldest credit card or other type of charge account as it tells lenders how long you’ve had established credit and, in this case, longer is better.
- If you have charge offs on your credit report, get them removed.
A “charge-off” on your credit report shows that someone who gave you credit in your past has reported that debt as having been “written off” of their books. That means that they aren’t trying to collect the debt any more and the credit bureaus have been informed that you are a greater credit risk because of it. You may want to consider going back to the lender and negotiating a settlement to get the charge back removed. If you don’t believe the charge-off is valid, you should dispute it with the organization that has reported the charge off.
- A car loan can help you get a car loan.
Like the mortgage tip above, having a car loan that has a good record of payment is also a “gold star” with lenders and can help you get another car loan. So make your payments on time and help yourself with a loan in the future.
- Dispute credit report errors or inaccurate information.
Inaccurate information and errors on your credit report happen more often than you may think. So make sure you check your credit report and dispute any errors or problems that you may find there.
- Consider working with a legitimate credit repair organization.
Lots of people these days have credit problems. That’s just a fact of life. If you are under a lot of pressure due to bad credit, you may want to consider working with a reputable credit repair company. Make sure you do your research to find the right company for you because, as will all industries, not all companies are created equal. You should do your homework and research on any company you are considering and discuss any decision with your financial advisor.
FederalAutoLoan.com is here to help you with your auto financing needs. Our application is fast, easy, and free and there is absolutely no obligation on your part whatsoever to work with the lender or dealer affiliate we connect you with. So take a couple of minutes now to fill out our online application request. You could be driving the car you need sooner than you thought!