How Your Job Helps You Get Approved for a Bad Credit Car Loan

Get Car Financing
Even with poor credit.

By

Contributing Writer

David Topham is an Automotive Content Manager for Internet Brands. He works as the lead editor for CarsDirect and Auto Credit Express, and contributes to those sites alongside other Internet Brands' properties like The Car Connection. He was born and raised in Michigan and is a graduate of Michigan State University.


, Contributing Writer - January 4, 2018

Bad credit auto lenders don't use credit scores as the sole determining factor for loan approvals. They also look at job history and a stable residential record, allowing many borrowers with bad credit to get approved for a car loan if they hold a steady job and earn a qualifying income.

The Path to Approval with Bad Credit

Having bad credit won't necessarily prevent a consumer from getting an auto loan. According to Experian data from the third quarter of 2017, 41.77 percent of all car loans belong to consumers with credit scores of 660 and below. Knock that down to 600 and lower, and the distribution still stands at 21.52 percent.

While bad credit won't always prevent a buyer from getting financed, it does limit where they can apply. These lenders – known as subprime lenders – offset the risk of providing bad credit auto loans with higher interest rates and a specific set of requirements.

The factors subprime lenders rely on outside of credit scores include income, debt- and payment-to-income ratio, employment history, residence stability, and a list of personal references. Borrowers also have to provide documentation to prove the information listed on their application, as well as a down payment (in most cases).

Job Time, Employment, and Income Requirements

Bad credit auto lenders scrutinize an applicant's income and job because they're concerned with how the borrower will pay back the loan. In general, subprime lenders are looking for:

  • A pre-tax monthly income of at least $1,500 to $2,000 – Lenders are looking for earned income that can be verified with computer-generated pay stubs. The minimum income amount needs to come from one, preferably full-time, job.
  • Minimum of six months of time on current job – Finance companies look for stability in an applicant's job to make sure they earn the income they state on their application.
  • A three-year history of employment with no major gaps (approximately 30 to 60 days) between jobs – In their search for stability, lenders also like to see a solid job history. Additionally, lenders may set the maximum number of jobs an applicant can have in the past few years (i.e. no more than three employers in the past three years).

These requirements are geared toward full-time W-2 employees. Different rules may apply to self-employed, part-time, and seasonal workers, as well as consumers who only have unearned income.

How to Find Bad Credit Auto Loans

Having a stable job and a regular earned income is a must for consumers looking for bad credit auto financing. Borrowers will also benefit by getting connected to a dealership with subprime lending connections.

At CarsDirect, we've teamed up with a national network of special finance dealers that use lenders who know how to help consumers dealing with bad credit. We can connect you with a local dealership free of charge. All you have to do is complete our obligation-free auto loan request form online to get started.

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, Contributing Writer

David Topham is an Automotive Content Manager for Internet Brands. He works as the lead editor for CarsDirect and Auto Credit Express, and contributes to those sites alongside other Internet Brands' properties like The Car Connection. He was born and raised in Michigan and is a graduate of Michigan State University.


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