Bad Credit Car Loans | Valley Auto Loans

Auto loans when your credit is less than perfect

As you would expect, it’s easy to apply for a bad credit auto loan. Simply fill the application out and wait, right? Actually, there is much more to making the best choice for saving the most amount of money possible, knowing your options and taking the right steps to reconstruct your credit score. This is your ultimate guide on pre-qualifying for a sub-prime auto loan and making the most informed choice possible in the process.

What is a Bad Credit Car Loan?

A bad credit car loan is a particular type of car loan designed for people with poor credit histories. A credit score is often considered being “bad” or “poor” when the FICO score falls under 640. Those that have credit scores that lie under 640 are labeled by many lenders as being risky to deal with, and therefore, it is hard for them to find loans or lines of credit.

When a person with a bad credit score cannot find a lender to assist them with financial moves such as purchasing a vehicle or buying homes, they are left to their own devices in many cases; one of which being taking advantage of bad credit car loans. In some cases, dealers, lenders, and financing companies might approve a loan for an individual with bad credit, but these types of loans usually come along with incredibly high interest rates to protect against a default.

To make sure you’re on the right page, consider obtaining a free copy of your credit report to get an idea of where you stand financially before you sign up for a car loan. Websites like offer one free copy every twelve months for users. Before you apply for a loan with, be sure to look over your credit report for accuracy and any discrepancies so that you are not assessed against incorrect information or old, nonexistent accounts.

What are the Requirements to Apply for a Bad Credit Car Loan?

While requirements differ from lender to lender, there are general requirements that has in place for applicants. These requirements entail:

  • At least 18 years of age
  • Currently lives in Canada or US, and is a legal citizen
  • Guaranteed employment (full-time or fixed) with at least a gross income of $1,500/month ($1,800/month suggested)

Gross income is the amount that you make per paycheck before it is taxed. To stay on the safe side, we require that all applicants verify and confirm their income by showing record of past tax documents. Of course, incomes such as child support, social security, alimony, or disability insurance should be included as well.

To ensure that all of our approved applicants will be able to make payments on their car loans, we cannot accept applicants that hold seasonal positions or have been at a temporary job for less than 6 months.

What are the Degrees of Bad Credit

It’s to be understood that while one lender might see your credit score of 580 as being unacceptable for receiving a car loan, another might consider it to meet the requirements of their loan. Look at the table below to determine where you fall in terms of credit. uses this information to determine many factors that play into your bad credit car loan.

1. Decent | 625-600
2. Average | 600-575
3. Below Average | 575-550
4. Semi-Poor | 550-525
5. Poor | 525-500
6. Bad | 500-450
7. Awful | 450-425
8. Terrible | 425-400

When analyzing each bad credit car loan application at, not every credit score is viewed in the same light. For example, a credit score of 575 is not always looked at as unsatisfactory. In actuality, the credit history is examined along with the score in order to find out exactly what happened to generate that number. His/her questionable credit history will be examined to determine whether it is habitual or situational.

Situational Bad credit

A bad credit score is reflected when an individual’s history is filled with maxed out credit card balances, defaults on payments to various accounts, frequent changes in jobs, and low-income. On the other hand, a situational bad credit history might unveil that an individual has kept a high-paying job for quite a long time and has diligently made payments on all credit accounts until an unexpected financial emergency springs up. In this case, the person with a situational bad credit score would likely be perceived as less of a risk to deal with than offering car loans to drivers with terrible credit, even though these two people technically have the same credit score.

Common traits of bad credit history include multiple outstanding balances, bankruptcies, and delinquent on the present accounts. Common traits of a situational bad credit history include sudden loss of job, divorce, a medical emergency, illness, etc.

How Long Will Improving My Credit Take?

Taking the right steps to reconstruct your credit score from 575 to 640 may seem like a daunting task, but it is probably the best way to get better rates on your auto loan. If a persons credit score is below but close to 575, it’s likely that they can even qualify for a loan, but they probably don’t qualify for the best or even the mid-tier rates. People with scores at or above 640, however, are usually able to qualify for these mid-tier rates, allowing them to save thousands of dollars over the life of the loan.

Fortunately, there are things you can do to get your credit score up. If your score is hovering 575, odds are you’ve made a few small mistakes with your credit, but you have not made a major mistake such as filing for bankruptcy or going through a repossession within the past three years. Therefore, these strategies should help you get the increase you need to qualify for better rates.

  1. Pay off charged off accounts. The most common reason for having a credit score in the high 500s is an account that didn’t get paid. Usually this is an old medical bill or credit card that got sent to collection when you forgot to pay the bill. A charge-off is usually sold to a bill collector who pays pennies for the amount you owe. The difference between what they paid and what you owe is their profit, but it also means that you can negotiate with a bill collector to get the bill reduced. By agreeing to pay off the balance, the bill collector makes a profit, and is usually willing to take the bad information off your credit report. Of course, make sure you get this agreement in writing before you pay off any old bills.
  2. Pay down your debt. If you are using a lot of your available credit, your score will go down. Get some of your debt paid off, or ask for the limits on your credit cards to be raised to improve the ratio between the debt you owe and the credit you’ve been extended.
  3. Wait. If you missed a payment, odds are you won’t be able to get the mistake taken off your record, but it will affect your score less and less as time goes on. Wait a few months, don’t make any mistakes, and your score will go up.

What is the Process for Applying for an Auto Loan when you have Bad Credit?

The auto loan process starts as soon as you apply for one. After completing an application and submitting it, will begin the search in a vast network of lenders and financing groups for a dealership that provides options for your particular case. There is no application fee and no obligation. We also offer auto refinance for bad credit, so as your credit improves over time you have the ability to refinance later for a lower interest rate.

One bad credit lender might be willing to lend money to an individual that has a car repossession in their history, while another might consider it too high of a risk. This is why using services like to search a diverse database for lenders that meet your needs is the best route to go. Because the network spans over such a long distance and contains so many dealers, it’s easy to find a match for any applicant, regardless of his/her credit situation. When the dealership is found for the applicant, they are then free to contact him/her about vehicle options. The vehicles available and the terms of the loan agreement will depend heavily on the dealership.

It might seem a little odd; selecting the dealers before you get to even see what vehicles are available. However, it’s easier to track down a dealership that works with applicants with bad credit rather than choosing a car and hoping that the dealership will offer options for those with bad credit. In this situation, it’s better to wait to get that dream car after you’ve gotten your credit in order.

Tips for Using Bad Credit Car Loans

It’s likely that you’ll eventually want to be able to cruise any dealership of your choosing without having to worry about being turned away because of your credit score. Bad credit car loans from can help make that a reality! Lenders will begin reporting your payments to credit bureaus, and because of that, it won’t be long before you start seeing some positive change with your credit rating.

Additionally, if there’s a vehicle that you have your eye on that’s just out of your financial reach, consider making a bigger down payment. A bigger down payment sends a more bold message to the lender that you are more serious about the vehicle, and they have more of your money in hand for security down the line if you default on payments or sustain a repossession entirely. You can put anywhere from a small percentage to nearly half the vehicle’s worth down. This strategy is most useful for those that suffer from a situational credit history and want to make a point that they are financially responsible.

Find a co-signer for your loan as well. Finding a co-signer can be a bit of a challenge because not only does it mean that you have to locate someone with good credit, but that person also has to be willing to take a financial risk on you. If you manage to find someone who is willing to co-sign, take advantage of it. It can save you thousands of dollars on the loan (sometimes to the tune of $100 less a month), and it will likely shorten the time needed to begin working with traditional lenders again.

If you’ve run out of options for finding a lender to work with you on getting a car, the time is now to apply with You aren’t going to find any other organization that will face you up with countless dealerships and help you narrow down the perfect one to work with, according to your needs and credit situation. Save yourself the time and hassle of getting involved with the wrong lender, and apply with today for a personalized loan and consultation.

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