Congratulations! You’ve finally secured that new job and are ready to buy a car. But wait—your credit score is still less than perfect and your brief job history has dealers turning you down. Worse, maybe the prospective car is the only way you can get to your new job. Isn’t there a dealership that will take a chance on you?
What Dealerships and Lenders Want
The quick answer is yes—there is most likely a dealership or lender out there that will take the chance on you even with bad credit and a new job. However, they want to see a few things from you to trust that you can pay a car loan installment each month. They are:
- Ability – Does your new job give you enough money to pay your bills and a car loan plus insurance and other fees?
- Willingness – Why are you in your current circumstances? Is it a long-term behavior, or the result of a bad situation you’re trying to recover from? If it’s chronic behavior, have you begun to take the steps to improve your financial picture?
- Stability – Even if your job is new, is there stability somewhere else in your life? How long have you been at your current residence? How long have you regularly paid your phone bill? Lenders want to see that somewhere you are stable. Maybe you even stayed at your last job for a long time and switched to increase your income or go into your chosen career.
Aspects of your Job that Can Help
A lender looking at someone with a poor credit score and new job may take a deeper look before saying no, especially if they specialize in bad credit auto loans. They might look at if you have a secondary steady source of income. Maybe this new job is to earn enough money for a car. They may ask how long you’ve been in the current position. Three to four months will look a lot better to them than one to two months. Also, is there a way to verify the income? A pay stub? Lastly, are you with the same company in a new job role, or within the same career as before but at a higher level? Sometimes the reason for the new job will make sense to lenders, and they’ll give you a pass.
Other Ways to Improve your Chances
Some lenders like to look at the big picture. They understand that circumstances can’t always be perfect, and they’re willing to look beyond a poor score and new job. The best thing you can do is plan carefully. Get that new job and prepare to take the bus or walk for a few months as you improve your finances. Some of the things you can do include:
- Create and stick to a budget – Start by sitting down and really planning out a firm budget. Look at the items you have to pay for and see where you can cut your costs. If you’re a budget newbie, enlist technology to give you a helping hand. Try apps like YNAB (You Need a Budget) or look at articles on how to cut your monthly bills.
- Pay everything on time – Even paying things on time for a couple months can help your credit score, even if it’s just a few points. More importantly, it shows potential lenders that you are ready to make a change.
- Pay down some debt – Again, this will show lenders that you are trying, and will improve your score a little bit. Budget that coffee money into a new coffeemaker and use the rest to pay off some of your debt.
- Save for a down payment – Another thing lenders like to see is a down payment. Use your new income to stash away some cash for the when time to buy is right. Try selling some stuff and maybe taking some side jobs to increase your savings. Once you’ve been on the job for more than a few months, have worked on your overall financial picture and have some cash to put down on the car, then give applying for a bad credit auto loan a try. Bring proof of what you’ve done and how you will continue to work on your finances, including paying your monthly car installment.
With some patience and effort, your new job can get you into a ride. Sometimes it won’t be right away, but take the steps above and it won’t be long at all.
