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What Lenders Look for Other Than Credit Score

Contrary to popular belief, a credit score is not the only thing lenders look at when considering you for a car loan.

One person with a credit score of 620 may be declined while another person with the same score will be approved - by the same lender!

How can that be? It's because lenders look at several factors in addition to your credit score.

One major factor they look at is your current employment situation. They want to know how long you've been at the same job (obviously, the longer the better), and how much income you make.

If you tend to move from job to job, they will not see you as being very stable. Even if you have a good credit score, this can hurt you. Lenders like to see at least 2 years continuous employment with no more than two job changes in the last 5 years.

Another major factor is your debt to income ratio. It's the percentage of your monthly gross income that goes towards paying off debt. Lenders like to see a maximum ratio of less than 45%. People with good credit can get by with a 60% ratio.

If you're willing to put down a large down payment, or have a co-signer, then these factors can be minimized.

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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