Car Financing With Very Poor Credit

The vast majority of auto lenders - about 95-98% of them - focus on one thing when determining whether you are auto loan-worthy: your credit, or FICO, score. This is great news for people with excellent credit scores (above the 700-750 range) because it makes everything so easy: you just want into the dealership, tell the finance manager to run your credit report, and get offered a great loan deal on the car of your choice. Very nice!

However, for the tens of millions of people with credit scores well below 700 or even 600 - life is not quite so simple when it comes to qualifying for an auto loan. If these credit-challenged individuals were to rely simply on their credit scores, they would likely never get a car loan. Or, they would get approved - but at a very unfavorable rate. And, your interest rate matters, since even paying 1-2% points more on a loan can mean thousands extra in interest payments.

Fortunately, there are a handful of auto financing companies and auto dealers - for both new and used cars - that specialize in lending to bad credit individuals. In addition to your credit score, bad credit auto lenders look at other factors to evaluate whether you qualify for an auto loan.

Bad credit auto lenders specialize in looking beyond your credit score. Here are 10 additional things they look at when considering whether to fund your loan:

1. Your overall credit history. If there was a particular event that hurt your credit score but overall you've had a strong credit history, be ready to point this out.

2. Your auto financing credit history. Have you made on-time car payments in the past?

3 Your residential history: do you own a home? If you are a renter, have you been responsible with payments?

4. Do you currently have a job?

5. If not currently-employed, have you worked consistently in the past with few gaps in employment?

6. Do you have a history of distinguished service, such as in the military?

7. Do you have a strong driving record with few or no accidents?

8. Are you a good student with a GPA of 3.0 or above?

9. Are you currently applying with other car financing lenders? (note:if you are, this can help: it creates a sense of competition - and they won't want to lose out on your business).

10. How do you present yourself in person? Are you dressed nicely and are you polite?

Of course, you do not have direct control over all of these items at this point in time. However, to the extent that you can do so, polish each of these areas and be read to speak to each one.

Find out more on how to qualify for car financing with very poor credit at: Car Financing with Very Poor Credit.