Applying for Bad Credit Car Loans
Consumers with credit issues are faced with a number of challenges when it comes time to apply for a car loan
Our experience
If you’ve experienced credit problems in the past or you have no auto credit – that is, you’ve never had a car loan – you should know that where you decide to apply for one can often mean the difference between a loan approval and a credit denial.
At Auto Credit Express we know exactly what you’re faced with because we’ve spent the last two decades helping car buyers with credit issues. We started in the car business by training dealership personnel in the subprime auto loans process.
Later, our company supplied trained special finance managers to franchised new car dealers. To increase customer traffic to these dealerships, we built a website where people with damaged credit could submit an online application – something we’ve continued doing to this day.
But enough about us and on to today’s topic: the problems car buyers with blemished credit typically face when applying for an auto loan.
In order to do this, we need to look at the three avenues consumers can typically take in applying for a vehicle loan.
Direct
The first option in requesting auto credit is to apply directly with a lender. This can be done either by dropping by a bank and applying with a lending officer or by going online if to the lender’s website if that option is offered.
Either way will work if you have good credit, but if your credit scores fall below a 640 FICO it’s usually not that easy.
Since most traditional lenders (banks and credit unions) only loan to prime and sometimes near-prime customers, applicants with credit issues are sometimes advised to not even bother applying. If they decide to continue, the application is typically turned down.
Applying directly with high-risk lenders has its own set of issues.
Because nearly all of these subprime auto lenders have documentation requirements (reviewing paperwork to verify employment and income to name just two) most of them only lend indirectly through franchised new car dealers. Therefore, car buyers needing higher-risk auto loans will find it difficult locating one of these lenders willing to take a direct application.
Another problem: since most a majority of these lenders work through dealers, even if one willing to take an application can be found, the limited choice means that someone who is approved could end up with a much higher interest rate since the lender is not competing with another bank for the customer’s business.
Indirect
A second choice car buyers have is applying indirectly for a car loan at a dealership. This also works if you have good credit, since you compare the dealer’s rates with those offered by area banks and online.
If an applicant’s FICO scores are low, however, this also raises an entirely different set of problems. Not the least of these issues is that applying at a particular dealer can result in a hit-or-miss situation since not all new car dealers have an interest in helping customers with credit issues and may not be signed up with even a single a higher-risk lender.
Targeted web site
For buyers with poor credit, a third choice is applying online at a web site that offers to help people with car credit challenges. In this case the chances of eventually getting approved depend upon the size of the dealer network the site supports and how transparent the website is.
First of all the bigger the network, the better your chances are of finding a dealer in your area or at least one that’s not too far away.
Being transparent, however, has to do with the website itself. Here’s what we mean by that:
To begin with, is the online credit application encrypted, making it secure? Secondly, does the company behind the site belong to the Better Business Bureau and, if so, what is its reputation? Thirdly, is does the site contain a resource section where you can learn about the bad credit auto loan process along with finance calculators to help you determine, before you apply, if you even meet the basic requirements for qualifying for one?
Finally, you’ll want to check if there’s a toll free number listed on the site that will connect you to an in-house customer service representative if you have any additional questions.
Quite frankly, if the web site you’re considering doesn’t offer all these elements, you might want to consider one that does before submitting your personal information over the internet.
Where we come in
At the Auto Credit Express web site you’ll find all those features. We also specialize in placing applicants with franchised new car dealers that can offer them their best chance for approved auto loans.
So if you’re ready to establish your credit, you can begin now by filling out our online auto loans application.
Later, our company supplied trained special finance managers to franchised new car dealers. To increase customer traffic to these dealerships, we built a website where people with damaged credit could submit an online application – something we’ve continued doing to this day.
But enough about us and on to today’s topic: the problems car buyers with blemished credit typically face when applying for an auto loan.
In order to do this, we need to look at the three avenues consumers can typically take in applying for a vehicle loan.
Direct
The first option in requesting auto credit is to apply directly with a lender. This can be done either by dropping by a bank and applying with a lending officer or by going online if to the lender’s website if that option is offered.
Either way will work if you have good credit, but if your credit scores fall below a 640 FICO it’s usually not that easy.
Since most traditional lenders (banks and credit unions) only loan to prime and sometimes near-prime customers, applicants with credit issues are sometimes advised to not even bother applying. If they decide to continue, the application is typically turned down.
Applying directly with high-risk lenders has its own set of issues.
Because nearly all of these subprime auto lenders have documentation requirements (reviewing paperwork to verify employment and income to name just two) most of them only lend indirectly through franchised new car dealers. Therefore, car buyers needing higher-risk auto loans will find it difficult locating one of these lenders willing to take a direct application.
Another problem: since most a majority of these lenders work through dealers, even if one willing to take an application can be found, the limited choice means that someone who is approved could end up with a much higher interest rate since the lender is not competing with another bank for the customer’s business.
Indirect
A second choice car buyers have is applying indirectly for a car loan at a dealership. This also works if you have good credit, since you compare the dealer’s rates with those offered by area banks and online.
If an applicant’s FICO scores are low, however, this also raises an entirely different set of problems. Not the least of these issues is that applying at a particular dealer can result in a hit-or-miss situation since not all new car dealers have an interest in helping customers with credit issues and may not be signed up with even a single a higher-risk lender.
Targeted web site
For buyers with poor credit, a third choice is applying online at a web site that offers to help people with car credit challenges. In this case the chances of eventually getting approved depend upon the size of the dealer network the site supports and how transparent the website is.
First of all the bigger the network, the better your chances are of finding a dealer in your area or at least one that’s not too far away.
Being transparent, however, has to do with the website itself. Here’s what we mean by that:
To begin with, is the online credit application encrypted, making it secure? Secondly, does the company behind the site belong to the Better Business Bureau and, if so, what is its reputation? Thirdly, is does the site contain a resource section where you can learn about the bad credit auto loan process along with finance calculators to help you determine, before you apply, if you even meet the basic requirements for qualifying for one?
Finally, you’ll want to check if there’s a toll free number listed on the site that will connect you to an in-house customer service representative if you have any additional questions.
Quite frankly, if the web site you’re considering doesn’t offer all these elements, you might want to consider one that does before submitting your personal information over the internet.
Where we come in
At the Auto Credit Express web site you’ll find all those features. We also specialize in placing applicants with franchised new car dealers that can offer them their best chance for approved auto loans.
So if you’re ready to establish your credit, you can begin now by filling out our online auto loans application.
