Why Auto Loan Providers Ask For Personal References

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - January 9, 2019

When you set out to get an auto loan, it's a big commitment, and if you're credit isn't in great shape, it can be an even bigger risk to lenders. Therefore, subprime lenders ask you for a little extra help proving what you state on your application. One way they do this is by asking for personal references.

What Lenders Get From Your References

Personal references are a way for lenders to verify information about you. They do this for many reasons, one of them being an extra measure of security. It's not that they don't trust you, but lenders need a way to protect themselves, and you.

The information gained from your personal references is threefold: identity verification, providing extra contact information, and provide verification that certain information is correct. Let's take a closer look:

  • Identity verification – Identity theft is a growing problem in the US, so lenders use your personal references to verify that you are who you say you are. Your references provide the lender with another level of security, and reduce their risk.
  • Information verification – Lenders also need to make sure the information you provide on your application is true and correct. References can be used to verify the info you provide is current such as where you work and where you live. Having people that can confirm this information is helpful to bad credit auto lenders.
  • Contact information – Finally, personal references provide a kind of backup for a lender if they can't get in touch with you. These additional contact options can give a lender piece of mind, and assure them they can contact you.

Tips for Your Personal Reference List

When you include someone on your reference list it's a good idea to make sure they know you're doing so. This way they're prepared for a lender's call, and to answer questions about you (preferably in a flattering way). Unsuspecting references may be caught off guard, and even refuse to answer questions if they feel uncomfortable.

Auto lenders typically like at least one family member as a reference that doesn't live with you, such as a brother, sister, or parent. It's also good to list close friends that you see or speak to often. Another good option for references is coworkers or supervisors that you have a good relationship with. These references are able to answer questions about your job.

Besides just who to list, you need to know what to list when you give references to your lender. Lenders ask for complete information on all references. This includes:

  • Full Names
  • Home Addresses
  • Home Phone Numbers
  • Work or Cell Phone Numbers
  • Email Addresses

Providing a solid list of personal references can help when it comes to your loan. Your lender may rely on the information your references share. If you're worried about any negative effects from having a lender call your references, don't – they aren't going to share your information or tell your references that you’re applying for a bad credit car loan.

Getting Started with an Auto Loan

If you've collected your list of personal references, and gathered all the other required information to provide to a lender, but have yet to find one, let us make your search a little easier. 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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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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