Planned on buying a car, but your loan application got rejected? Well, that can really put a twist on things, especially if you are in need of a car. Before you look at your next options, like re-applying or applying somewhere else, you need to go over why you were rejected. It will help you make the right move next instead of wasting time. It would be pretty foolish if you made the same mistake twice and got rejected for the same reason as before.
Here’s what you need know on why your auto loan application got rejected.
Poor Employment History
A financial institute runs a fine comb through your financial background before passing your loan application. For them, it is important that you are able to pay back the loan regularly. This involves having a stable job. They will look at how long you have managed to maintain a stable job. They will look for trends like whether you lost previous jobs after taking a loan. Most of all, they will look at your present employment history to check if you have a job and will be able to pay back the loan.
So either your employment history shows you don’t hold a job for too long, or you don’t have one right now.
Bad Credit Report
- Your credit report contains valuable history on your income and debt situation. Poor income and high debt says you can’t manage another loan.
- Financial institutes will check your personal experience with loans and repayment. They will especially look out for late payments, which won’t bode well.
- If you have just started using credit cards or taken a loan, your credit history will be fresh and won’t be much to look at. In fact, most financial institutes tend to reject loan applications for applicants who don’t have any credit history.
Low Credit Score
A credit score is considered as a rating on your credit history. Anything below 500 is considered a less-than-average score, and many loan applicants are rejected for having a low credit score.
A low credit score basically says that your financial situation is poor, you aren’t financially responsible, and you don’t make the monthly payments on time.
What Can You Do?
You will read plenty of articles offering you quick fixes and solutions to improve your credit score and other advice on how you can get an auto loan. However, there are no quick fixes; it will take months or a year to improve your credit history and score.
The fact is that you can’t rely on a credit report or rating to say that you are not financially responsible or that you can’t make the monthly payments. They clearly don’t take into account any financial problems or family crisis.
Rather than wait, you can get a loan from Insta Auto Loans. Whether you have bad credit or not, we understand our customer’s situation and are happy to help you with an auto loan.
