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Top Reasons Why You'll Be Rejected For a Car Loan

Getting a car loan can be difficult if you don't have a good credit history. Lenders don't like taking risks so they're quick to pull the trigger when it comes to rejecting borrowers.

In general, there are four levels of credit tiers that all borrowers fall under. Tier A is the best followed by B, C, and D.

Lenders have slightly different requirements for each tier which include credit score, lenght of credit history, employment history, and other factors.

The following credit scores are usually required for each tier:

TierCredit Score
A720 +
B680 - 719
C630 - 679
D540 - 629
(Tip: Check your own credit score here)

If you don't qualify for any of these tiers, your chances of getting a car loan is close to zero.

Even if you do qualify for Tier D credit, you can expect to pay a very high interest rate for your loan, sometimes as high as 27% depending on your state's usury laws.

Having a credit score that qualifies for one of the tiers doesn't guarantee you will get a car loan. If you have any of the following items on your credit report, you will likely be rejected for a car loan.

  • Open bankruptcy
  • Federal or state liens
  • A repossession
  • A foreclosure
  • Open lawsuit
  • Dischareged bankruptcy but behind on payments
  • Behind on child support
  • A "skip trace" report
  • History of charge-offs and collections

If you can't get a car loan, you need to work on fixing your credit, get a co-signer, or simply hold off buying a car until you save enough money to pay with cash.

My Recommendation for Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Gregg Fidan

About: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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