Lending criteria have changed during the past two years making it a bit tougher for customers to obtain financing for homes or vehicles.  If you have bad credit and you are looking to get financed for the purchase of a new or used vehicle you should take a minute to review what lenders currently look for in an applicant.

Below are minimum requirements for a bad credit car loan approval in today’s market:

• Minimum Income: Minimum of $1,900-$2,000  (Buy Here Pay Here lots and Rent to Own car dealers will typically have lower income requirements)
• Bankruptcy: The 341 meeting of creditors must be completed before you can be approved following Chapter 7 Bankruptcy.  For Chapter 13, an Authorization to Incur Debt is required from the trustee before approval can be completed
• Repossession: No repo’s within the last year unless it was included as part of a bankruptcy filing.
• Credit Scores: Most mainstream lenders and dealers will work with credit scores above 600, though many Buy Here Pay Here Dealers and Rent to Own dealers may not run a credit check.

Yes, it is a bit tougher to get approved for car loans in our new economy, but it is not impossible. Don’t let tougher credit guidelines scare you away.