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GuideCar Loans

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.

3 Steps Every Car Buyer Needs to Take to Save Maximum Money

The key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:

Step 1 Get Prices From My Trusted Network

Select the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Select Vehicle to Get Local Pricing

Step 2 Get Prices From TrueCar / CarsDirect

TrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.

Step 3 Complete my Checklist

Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...

  • Best Rebates, Incentives, and Lease Deals
  • Latest Car Buying Scams and Tricks
  • The Best & Worst Time to Buy a Car
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About The Author

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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