Improve Credit for a Subprime Auto Loan

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Even with poor credit.


Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - February 11, 2019

Your credit score plays an important role in determining car loan approval. If you have bad credit (a credit score below 660 to 600), you’re probably going to need a subprime auto loan. Subprime lenders still look at your credit score, but base approval on outside factors, too. If you’re looking to improve your credit score for better car loan approval odds, keep reading.

Tips to Help Build Credit

Your credit score changes daily, and it can be tough to know exactly where it stands. One of the most obvious things you can do to improve your credit is to pay all of your bills on time each month. Besides that, what else can you do to raise your credit score? Take a look at a few other options:

  • Become an authorized user – A great way to see your credit score improve is to become an authorized user on someone’s credit card account. You get the benefits of seeing your credit score improve without having the responsibility of paying for the bill – as long as the primary card holder pays it each month.
  • Take out a credit-builder loan – Credit-builder loans are generally offered by credit unions and community banks. These loans require you to make regular, on-time payments each month. At the end, you get the money back, plus interest, and should see an increased credit score.
  • Add another line of credit – If you don’t want to take out a credit-builder loan, but want to use other forms of credit, adding a credit card or other type of loan can help improve your credit score. The key is to make sure you can make each monthly payment on time and keep your credit card balance low. If not, your credit score certainly isn’t going to improve.

Qualifying for a Subprime Auto Loan

If you’re considering taking out a subprime auto loan when your credit isn’t at its best, make sure you know what the other requirements are. To get approved for a subprime car loan, you need to meet the lender’s basic requirements, including:

  • Income – Minimum income amount varies, but lenders typically want to see you make $1,500 to $2,000 a month before taxes. You must show proof of income in the form of a recent computer-generated pay stub showing year-to-date income, or recent tax returns if you’re self-employed.
  • A working phone – The lender needs to know they can contact you. Make sure you have a copy of a recent phone bill in your name from either a landline or contract cell phone.
  • Residency – Bring in a recent utility bill in your name at the same address listed on the loan application.
  • Identification – Bring in your driver’s license to prove you are who you say you are.

Depending on the lender you work with, you may also be required to have a cosigner. Make sure you have a cosigner on hand just in case they ask for one. In addition, have a list of personal references ahead of time for the lender.

Ready to Take out a Car Loan?

You don’t need perfect credit to qualify for a car loan, and you can take steps toward raising your credit score. It doesn’t hurt to practice good spending and paying habits, and if you feel confident about taking on an auto loan, we want to help get you started. Here at CarsDirect, we work with a nationwide network of special finance dealers that can help people get the bad credit auto loans they need. Get connected with a local dealership that has the lending resources you need today. Simply fill out our fast and easy car loan request form to start the process.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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