You've been searching for weeks, and finally, you've found it. The car you love. The features are all there, the colour is just right, and the fuel economy is top notch. Now, all you need to do is work out the financing! Suddenly, everything changes. The salesperson informs you that they will not be able to approve you for the loan. What happened?
If you have damaged credit, you may be familiar with this scenario. Possibly you thought your credit wasn't as low as it actually is, or that you had sufficient income to get approved. Unfortunately, most traditional lenders will always have issues approving you without a strong credit history. What you need is a dealer who can work with your credit and financial history, not against it.
Reasons for Car Loan Denial
Some of the most common reasons for being turned down by a lender have to do with things that have affected your credit.
- Unpaid debts.
If you have any collections on your credit report, these will indicate to a lender that you have trouble keeping up on your payments, and run a high risk of defaulting on a loan. Even if those collections are in the past, they will still see it as a sign of instability.
- Consumer Proposals & Bankruptcy.
While a Consumer Proposal is less damaging to a credit report, with an R7 rating, and it indicates that you are repaying a portion of your debt, dealers may still have issues working around it. And a bankruptcy fares worse, as it rates as an R9 on your credit, which is the lowest rating you can have. Most lenders won’t even look at considering you in this case.
- Thin File.
This is an interesting scenario to be in, because a lender isn't turning you down because you have a bad credit history, they are turning you down because you don't have one. This is commonly referred to as a "Thin File." Traditional lenders unfortunately see Thin File buyers in much the same way as Bad Credit buyers. Without anything to base a decision on, the risk is just too high for them.
Alternative Financing Is the Key
Finding a dealer who is equipped with the knowledge and tools to help you seems simple enough, but it takes time to find one on your own. Time you don't have. Besides, you need to have the time to select the right vehicle for you. Canada Auto Loan is here to help you make that happen.
We have a large network of dealers throughout Canada that are ready and waiting for you. When you complete the fast, secure and obligation-free application, we can connect you with the dealer who is best suited for your unique situation. The wait is over, start today!