How to Get Approved for a Car Loan with Bad Credit Score

What is credit score

Applying for a Car loan? Do you have a credit history in your loan profile?

Whether you have a record of no credit or bad credit it will be difficult for you to get approved for any loan.

Your financial assessment is a determining factor to get approved or rejected.

People with a higher credit score have a higher chance of getting a loan from financial institutions and are deemed low risk when considering repayments of their capital investment. These applicants may be offered a higher limit and a lower interest rate than a consumer with a low credit score.

The number of loan payments or the repayment period will be more favorable for a person with a higher credit score.

A good credit score holder always remains in an advantageous position to get approved for a car loan from banks, car dealers or other financial institutions. For these consumers the process is simple.

However, in the financial market, getting a car loan is also easy for individuals with bad credit because a car loan is classified as a secured loan. Some of the car dealer will finance the auto loan to those with no credit or even bad credit.

What is a Credit Score?

Credit score is calculated on the basis of your credit history. Generally it is a three digit number. There are several criterion and process of calculating Credit Score. Credit scores in Canada range from 300 (lowest, or just getting started with credit) to 900 points (the highest credit score you can achieve).

Payment History

This 35% of the total score. It is a primary indicator of approval of loans. History of payments shows whether the applicant makes his payments on time, irregularly or late. Late payments are reported under the Payment History. The factors are divided in intervals of 30, 60, 90, 120 days or more depending on how late the payment is received.

Owing an Account

This part of the credit report is 30%. Any open account under the consumer’s name will appear in this section. The balance versus the limit is the important part of this section of your credit report. It is very important to keep the balance of these accounts to below 70% of the limit. If the balance is higher than 70% it will drag down the credit score.

Credit Blending

This is 10% of the total credit score. This part is about credit mixing, there are different types of accounts, installment loans and credit cards, vehicle loans and mortgages.


Typically, the minimum requirement for a person to qualify for an auto loan with a low credit score is that they earn at least $1,800 every month before taxes or deductions.

Here’s the breakdown:

  • Hourly: At least $10.50 per hour for 40 hours per week
  • Weekly: At least $420 per week (before deductions)
  • Bi-weekly: At least $845 every two weeks (before deductions)
  • Twice per month: At least $900 twice per month (before deductions)
  • Monthly: At least $1800 per month (before deductions)

Canada Auto Experts works consistently with Canadians, so they will be approved for quality vehicles, quickly.

Being approved for car financing with bad credit can take some time if you try to do it on your own. But Canada Auto Experts will help you to get the best vehicle and financing choices quickly.

If you require a reasonable vehicle or need to modify your credit, click here to apply with Canada Auto Experts.

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