If you wish to purchase a car, you may feel a little trepidation if you have a bad credit score. Nonetheless, it can be achieved through securing bad credit auto loan financing. Take the following “True or False” quiz and see what you know about this subject. You at least have a 50-50 chance in answering each question correctly.
(1) When applying for auto bad credit loan, if you need to remove disputed items on your credit report, you might have to wait at least 6 weeks before you can apply for an auto loan for bad credit.
Answer: False. Normally, it takes about 60 days to remove disputed items on your credit report.
(2) If you’ve just moved, a lender will still look favorably on your application for an auto loan for people with bad credit.
Answer: False. If you’ve moved in the last six months, lenders will not consider this to be a favorable item in considering you for an auto loan with bad credit. Lenders do not like people who move around. They like people who are stable and continue to prevail in their circumstances.
(3) You’re usually considered a sub-prime borrower at any credit score below 500.
False. Generally, if you’re score falls below 500, you’re not considered any type of borrower even for a bad credit auto loan refinance. Sub-prime borrowers have credit scores that range from 550 to 680.
(4) If you want to be considered for a bad credit auto refinancing loan you should make sure you’re not trading a car you still owe money on, that disputed items are removed from your credit report and that your debt to income ratio and credit balances are low.
Answer: True. Lenders like to see this kind of stuff.
(5) If you’re a recent college graduate and have yet to obtain a job, you can still qualify for an auto bad credit loan.
Answer: False. If you’ve just graduated from college, you shouldn’t consider applying for an auto loan for bad credit until you’ve been on the job for at least six months.
(6) It usually helps to show that you’re paying on a mortgage or that you’ve had a past refinance when applying for bad credit auto loan financing.
Answer: True. Mortgage loans and refinances show a degree of stability and that the consumer has been and is making regular payments to pay off a debt.
(7) With regards to obtaining an auto loan for peole with bad credit, if you do not have a credit history, you should be on the job at least one year with the same employer.
Answer: True. This is the minimum requirement.
(8) If you have a credit history, you should be on the job at least 6 months with the same employer to qualify for an auto loan with bad credit.
Answer: False. You should be permanently employed for at least two years to be considered for a bad credit auto loan refinance.
(9) When being considered for bad credit auto refinancing loan, you should not have had a repossession in the last 2 years unless it was included in a bankruptcy.
Answer: False. Normally you’ll be considered for a bad credit auto loan if the repossession occurred within the last year outside a bankruptcy.
(10) If you’re a sub-prime borrower and you have a co-signer, the lender can use the co-signer’s income in order to approve a bad credit auto loan.
Answer: False. Your loan will still be based on your income even if you have retained a co-signer to pledge to pay the loan amount.
How did you do? You can still obtain an auto loan with bad credit. It just takes knowing what steps to take and you’ll be in a new car in a small amount of time.
