Top Reasons Why You'll Be Rejected For a Car LoanGetting 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:
|B||680 - 719|
|C||630 - 679|
|D||540 - 629|
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.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
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