When it comes to applying for credit, lenders are becoming more and more strict with their criteria. Not only this, they are also requiring you to provide more and more information.
If you are looking to buy a car and need a loan, below is an article which can help you to prepare yourself and your finances to meet a lender.
Does Your Score Reflect Your History?
While the idea may be foreign to you, identity theft is very much a real thing which can happen to anybody. For this reason, before you sit down with your lender, that you ensure your credit history is your own and nobody else’s. Obtain a copy of your credit report and look for any of the following instances:
● Your name is misspelled
● You don’t recognize an address
● There is a credit application which you didn’t make
● You can see a debt which you don’t owe
● There are outstanding payments
Any of the above can be a sign that your credit report is affected by credit applications which you didn’t make. If you see any of the above or any other inconsistencies, be sure to clear them up with the credit reporting agency before you meet with your lender.
What Is Your Current Financial Position?
Simply sitting down and telling them how much money you make each month isn’t going to cut it, Instead, a lender will want to see documentation which shows them just how much disposable income you have. That is, how much money you have to spend after all of your expenses have been paid. If you can’t show them this then they aren’t going to approve your car loan.
While you don’t have to go into the level of detail where you tell your lender how much you spend at the Groupon Coupons page for Finish Line each month or how often you fill up your car with gas, they will want to see a basic budget which clearly shows your income streams matches against your outgoing expenses.
Prepare Your Documentation
Of course, any reputable lender isn’t going to trust a just a budget by itself. To support your budget and your application you will need to bring a range of documents, including the following:
● Six months of consecutive pay stub/payslips
● Any statements for income streams
● Any and all debt related statements
● Any information about savings
● Any investments you have
Bringing all of this information to your car loan broker during your first meeting is a good way to get your application processed quickly.
When it comes to getting a car loan, the most important thing to remember is that it is a debt which you are taking on. If you are unsure that you are in a solid financial position and can continue to maintain the repayments, consider waiting until you are in a better financial position or when your credit score and rating will allow you to take advantage of lower interest rates.