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Summary

Factors Affecting Approval:

• Credit History & Score: Lenders consider your credit score, history, employment status, and financial situation.
• Employment History & Income: Stable employment and reasonable income improve loan approval chances.
• Debt-to-Income Ratio (DTI): Lower DTI increases chances of approval but isn’t the sole factor.

Improving Loan Approval Chances:

• Enhance Credit History: Review and correct your credit report, pay bills on time, and avoid new credit applications if possible.
• Increase Income & Stability: Maintain stable employment and consistent income to better your chances of approval.
• Reduce Debt: Pay off existing debts, consider debt consolidation to manage repayments better.

Wondering how to get a car loan with your very bad credit score? If you’ve been knocked back before, the process of applying for bad credit loans can be daunting. As specialists in helping everyday Australians borrow money for car loans, we’ve seen it all. Financial hardship can affect anyone, and we believe that everyone deserves a fair go. If you’re in the market for a bad credit car loan, look no further than the team at Tru Blue Motors.

At Tru Blue Motors, we strive to help everyone, regardless of their history. We can help you secure the financing you need to purchase the car of your dreams. Our car loans for people with bad credit aim to help you secure the car you need, no matter your history.

Securing Bad Credit Loans

Factors such as a low credit score, defaults and bankruptcy make it challenging to get approved for a car loan, but it’s not impossible. In this article, we’ll discuss some practical tips for using bad credit loans and improving your credit rating and your chances of approval. We’ll also touch on why it’s essential to adhere to responsible lending practices and understand the terms and conditions of your car finance options before you borrow funds.

At Tru Blue Motors, we’re proud to offer a wide range of quality used cars and vehicle finance options to help our customers find the perfect vehicle at an affordable price. Whether you’re looking for a near new car or a used car loan, our team of experienced professionals will work with you to find the right loan term and financing solution that fits your needs and budget. We always work on a case by case basis to find the right solution for you.

We understand that purchasing a car can be a significant investment, we offer dozens of lenders and various financing options, to ensure you’re getting the best rate and affordable repayments to suit you.  We work with a licensed finance broker and Australian credit providers, so you can rest assured that you’re dealing with reputable and trustworthy companies.

Key Factors Affecting Approval for Bad Credit Loans

Credit History & Credit Score

Your credit score and credit history are critical components that lenders consider when deciding to approve or deny your car loan application. Credit checks are standard practice for lenders, and applying for a bad credit loan is no exception. 

A bad credit history impacts your credit score, making it more challenging to secure car finance. It is essential to maintain a good credit score, which can be done by paying your bills on time and managing your finances responsibly (more on this later). Lenders also look at your employment status and financial situation, including your income and expenses.

The team at AnyFin carefully consider your situation and compare car loans from different lenders to achieve the best loan approval option. 

Keep in mind that car loans typically have a fixed or variable interest rate, which affects your monthly repayments. There are also other factors and costs to consider such as early termination fees, balloon payments, account keeping fees and ability to make extra repayments which will impact the overall cost of your loan. 

Thanks to the helpful team at AnyFin, you’ll be able to easily navigate all of the loan options to find a loan that suits your needs.

Employment History, Status and Income

When it comes to applying for car finance, your employment and income are crucial factors that lenders consider as part of the approval process. They want to ensure that you can afford to make your repayments and that you have a stable income source. 

A good employment history, job stability, guaranteed benefits and a reasonable income level can improve your chances of getting approved for a car loan. On the other hand, if you have a low income or an unstable employment history, it may negatively impact your application.

It’s also important to note that bad credit can affect your chances of getting approved for a car loan, but there are options available to help you get a loan with bad credit history. Before submitting your application to lenders, our team carefully consider your situation while helping you throughout the process.  

They will help you gather the necessary documentation and only consider lenders that are a suitable match to your unique situation, ensuring Tru Blue Motors’ customers have the best chance of approval every time.   

Debt-to-Income Ratio:

When applying for a car loan, it’s crucial to understand your debt-to-income ratio (DTI) and how it can affect your chances of approval. A high DTI indicates that you have more debt than you can handle, which could lead to difficulties in making regular car loan repayments. 

It’s important to keep in mind that a low DTI doesn’t guarantee approval for a car loan, as other factors such as credit history, income stability, and employment history also play a significant role in the lender’s decision-making process for loan applications. However, having a low DTI can increase your chances of approval, it gives you more surplus capacity and affordability for a new car loan.

Practical Tips for Improving Your Chances of Loan Approval

Improving Poor Credit History

Improving poor credit history is crucial to increasing your chances of approval for car finance. We always start by obtaining a copy of your credit report to review your financial behaviour and identify any errors or discrepancies. A good credit history can go a long way in helping you secure a car loan.

If there are any inaccuracies in your credit report, its best to get them rectified to improve your score. Paying off outstanding debts, making payments on time, and avoiding new credit applications can also help improve your credit score over time.

Increasing Income and Employment Stability

If you have a low income or unstable employment history, consider improving your employment and income situation prior to applying. A minimum 3 months in your job, consistent hours and permanency in employment are all positive factors that help you with approval for cash loans.  

In certain circumstances it is possible to be approved for a car loan even if you just changed jobs and haven’t been in your job for 3 months.

Reducing Debt

Reducing your debt can help improve your chances of approval for car finance. Start by paying off any outstanding debts you can manage, and if it makes sense for the state of your finances, increase repayments on your current debts to pay them off quicker. 

Debt consolidation is another option to investigate if you have other outstanding debts, as debt consolidation rolls your multiple debts into one manageable repayment. This can help lower your DTI and make you a more attractive borrower to lenders.

Why Tru Blue Motors is a Trusted Provider of Second-Chance Car Finance

At Tru Blue Motors, we understand that bad credit can be a significant obstacle to obtaining car finance. That’s why we specialise in second-chance car finance and work with reputable lenders to find the best financing options for our customers. Our finance specialists will assess your financial situation and tailor a car finance deal that suits your needs and budget. We offer competitive rates, flexible loan terms, and the option for additional repayments. Submit a car finance application today!

Frequently Asked Questions About Bad Credit Loans

What’s the difference between credit history and credit score?

A credit score is a figure that is determined by your credit history. Your credit score takes into account your loan-paying history, your outstanding loans and their size, as well as how often you have applied for loans and other credit and utility accounts.

How do I improve my bad credit rating?

There are several ways you can work to improve your credit rating in Australia. Start by requesting a copy of your credit report, and report any inaccuracies or errors. After that, the process includes forming healthy habits, such as paying back your loan repayments and bills on time to improve your credit score. You should also look to be more selective when applying for loans, as reducing your requests for credit can improve your score. Building up your savings will also improve your bad credit score.  

What is a good credit score? What is a bad credit score?

This is dependent on a few factors, including which of the major credit reporting agencies you use to generate your report. Generally speaking, credit scores between 0 and 300 are generally considered to be poor credit scores. 500-700 is good, while credit scores of 800 and above are considered to be very good.

Can a bad credit loan help improve my credit score?

If managed responsibly, a bad credit loan can help improve your credit score. Making timely payments and paying off the loan as agreed can demonstrate good financial behaviour and potentially boost your credit rating.

Can I apply for bad credit loans online?

Yes, many lenders offer online applications for bad credit loans. To get started with your bad credit loans process with Tru Blue Motors, start your pre-approval here.