A bad credit score can make it difficult to get approved for a car loan, but it doesn’t have to be the end of the road. Exploring different financing options and having a good understanding of application requirements can make the process smoother if you have poor or non-existent credit.
At Open Road Outlet, we like to be upfront about what you need to get a car loan with us. These are our minimum requirements, regardless of your credit standing:
- Valid driver’s license
- Above 18 years old
- Resident of Canada
- Monthly income of at least $1,500
Once those boxes are checked, we’ll set up a meeting to verify your income and discuss your financial situation. But don’t stress, we don’t need personal details like your Social Insurance Number (SIN) to get the application started.
Different lenders have different requirements
We offer in-house financing, which means we lend our own money to customers directly. Our loan requirements are a lot more flexible because of this and we are able to provide financing for customers that banks would usually turn away.
Because of their stricter rules and regulations, banks and credit unions generally require more information from loan applicants. When you apply for a car loan through a bank you usually have to provide the following:
- Social Insurance Number
- Credit history and credit report (specifically the score)
- Address and previous address (if current address is less than 3 years)
- Income (employer info, how much you make)
- Monthly housing costs (rent, mortgage, hydro, property tax)
- Monthly payments (loans, credit cards, lines of credit)
- Household costs (all household bills)
- Vehicle bill of sale (to finalize the loan)
All of this slows down the loan approval process and usually excludes customers with a bad credit score, even if they meet the bank’s minimum income requirements. In-house lenders, on the other hand, have more control over their car loan approval process and can usually offer competitive interest rates for those with poor credit.
How do credit scores factor into a car loan?
So, how much do credit scores matter for a car loan? Like we mentioned above, it depends on where you apply. Banks and other financial institutes usually put a lot of weight on credit scores because they indicate your reliability as a borrower. People with a low score are often deemed riskier borrowers than those with high scores.
In Canada, credit scores range from 300 (terrible) to 900 (excellent). If you have a score of 620 or higher you have average credit or better and will likely be approved for a car loan wherever you go. Lower than that and you’ll have a hard time getting a car loan from a traditional lender, like a bank.
While we do check credit scores at Open Road Outlet, we also look beyond that three-digit number and take your whole financial situation into account. Because we specialize in bad credit car loans, we have the expertise to help with all kinds of credit challenges.
Open Road Outlet’s car loan qualification process
Applying for a car loan can be an intimidating process if you have bad credit. We try to make it less stressful by working together to create a budget, define the loan terms and find a vehicle that works for you.
To get the ball rolling, all you have to do is fill out our easy online application. It takes less than two minutes and you can find out if you meet our pre-approval qualifications without even stepping into one of our three Winnipeg locations.
If you still have questions about our bad credit car loan requirements you can get in touch with one of our knowledgeable team members today.