Having a car loan application rejected isn’t fun, but it’s also not necessarily the end of your dream to own a vehicle. If you’ve applied for financing to buy a car and have been rejected, here’s what you can do.
Find Out Why You Were Rejected
Begin by finding out why you were rejected and making sure the denial was for an accurate reason. Drivers sometimes have car loan applications rejected because of an error the lender made or inaccurate information on their credit report. You’ll want to make sure these weren’t why your application was denied.
Shortly after your application is rejected, you should receive a letter stating the reason for the denial. You may even find out why you weren’t approved right after you apply if you apply somewhere in person.
As you’re waiting for this letter, look up your credit report from the three main reporting bureaus (Equifax, Experian and TransUnion). You can get a free report from each bureau once annually through annualcreditreport.com. (Checking your own credit doesn’t affect your score.)
Make sure the information on each report is accurate, and that the lender’s stated reason for denial makes sense in light of your credit history. If there’s an inaccuracy on a report, contact the appropriate bureau to have the error corrected. If the stated reason for denial doesn’t make sense, ask the lender for a further clarification.
In some situations, getting approved for a car loan is as simple as correcting an error on your credit report or fixing a mistake made by a lender.
Apply with Another Lender
Next, consider getting a second opinion if your car loan application was rejected by just one lender. No lender is the sole authority on who is and isn’t approved for financing, and another lender might have a different take on your application.
If a single dealership or bank has denied your application, consider submitting an application to another dealership, a local credit union or your current bank. There’s a chance they’ll approve you, especially if your credit history is marginal but not terrible.
If another lender won’t approve your application as it currently is, try to reduce how much you’re borrowing. Scrape all the money you can together so you can offer the largest down payment possible, and look at lower-priced vehicles. If you’re able to reduce the amount you’re asking to borrow, you might be approved.
Ask Someone to Cosign
The final short-term solution is to ask someone you know to cosign with you. Having a cosigner whose credit is better than yours lets you finance a car based on their credit history and score. If you’re able to get a cosigner with good credit, this is often a sure-fire way to get approved for a car loan.
Talk with the Finance Department at McGrath Nissan
For help securing financing even if your initial car loan application has been rejected, come see the finance team at McGrath Nissan. The dealership is conveniently located at 945 East Chicago Street in Elgin, so it’s just a short drive from anywhere in Elgin, St. Charles or West Dundee.
When you come to the dealership, the finance team will be happy to help you explore your financing options. They’ll gladly review your current credit situation, look over any rejected car loan application you have and recommend a few next steps that may help you secure financing. The finance team members at McGrath Nissan are experienced professionals who have assisted many drivers with bad credit, and they’re here to help you.