If lenders turn you down for a car loan based on your credit score, finding a co-signer might be a solution. However, co-signers are generally required to have good credit. Here’s what to look for in a co-signer.
Requirements of a co-signer
When looking for a co-signer to increase your chances of auto loan approval, look for someone with disposable income who can cover your payments if needed, and someone with a long, healthy credit history and a credit score. credit greater than 660 (considered good credit).
Lenders vary in their exact co-signor requirements, but co-signers generally need to be able to meet all of the same or loan requirements similar to those you. The point of having one is that you can “borrow” their good credit score to help you meet auto loan requirements. The co-signers must also promise to make payments for the car if you can’t. Also, in the eyes of a lender, co-signers with good credit histories may be more likely to help you.
If you bring in a co-signer who has a lower credit rating than you and has no income, they are unlikely to help you get a car loan. A co-signer with poor credit also may not be of much help in qualifying for a low interest rate on a car loan, as credit scores are usually the main factor in interest rate levels in the car loan. which you are placed.
Can’t find a co-signer?
Not all borrowers with bad credit have someone they can ask to co-sign. However, keep in mind that a co-signer does not have to be a family member. They can be a friend, coworker, acquaintance, roommate – your relationship with them doesn’t matter. Auto lenders want to know if they have good credit and would be able to help you pay off the loan if you can’t.
The only person who cannot co-sign a car loan with you is the spouse, because they would become co-borrower instead of.
Remember, when you ask someone to co-sign, they will be responsible for your car loan if you can’t keep up. They are directly related to the loan business, so if you miss a payment their credit rating will be affected as well. It also means that when you maintain a good payment history on the co-signed auto loan, you and the co-signer both benefit from positive and timely auto payments!
Need to go it alone?
If a co-signer is out of the question for your situation and your credit score is making it difficult to get the vehicle you need, then exploring subprime auto loans could be your next step.
Subprime lenders are registered with special finance dealers, and they are no strangers to credit problems. If you are in need of vehicle financing and want to connect with a dealer registered with subprime lenders, look no further than Auto Express Credit. Once you have completed our free auto loan application form, we will look for a special financial dealer in your area.