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SpanishCommon Reasons Car Financing is Denied
For some customers, receiving approval for car financing is a quick and easy process, but not everyone. If you have been denied car financing in the past, the experts at Indy Car Financing are here to help. There are many reasons why car financing is denied, and our experts compiled a list of most common reasons to help you prepare for securing your next automotive investment.
Credit Score
Before applying for auto financing, be sure to check your FICO credit score. This is a number between 300 and 850 that determines how financially responsible you are as a loan applicant. To receive approval for an auto loan, most lenders require a credit score of 600 or higher. If your credit rating is below 600, it can be difficult to receive financing. However, for many applicants, car financing can be a great way to improve and establish a credit score through regular monthly payments.
Debt-Income Ratio
When lenders consider a potential applicant, they look at their debt-income ratio. If the amount of debt you have is more than 40% of your income, lenders might consider you a bad risk. Before applying for car financing, make sure to pay off as much debt as you can afford. This also includes any outstanding bills that are at risk of being sent to a collection agency. If you can’t afford to pay off some of your debt in the near future, consider saving up for a while before applying for an auto loan.
Employment History
If you have a history of changing jobs and residencies on a regular basis, some lenders might see this as a sign of instability. Holding a steady job is a great way to show a lender that you are a responsible individual and that you have the ability to make payments on a routine basis. Living in the same place and having the same job for at least two to three years is a good step to take before you start applying for car financing.
Choose Car Financing from Indy Car Financing Today
To help make your next automotive investment as affordable as possible, choose your local Indianapolis finance headquarters, Indy Car Financing. If you’ve been denied for car financing in the past, contact our experts at 855-468-6215 for a consultation.