How to Increase Your Car Loan Application Approval with Bad Credit

3 min readMar 20, 2024

It is required to have a credit check when you are trying to get any financial assistance, such as a loan. If you have good credit, this is not something you need to worry about. But if you have bad credit, there can be a lot of stress and anxiety during this process. This is why we are here to help you get approved for a car loan, even if you have bad credit. We want to go over some strategies to help you improve your credit.

Understanding Credit Scores

A credit report is generated based on an individual’s credit history, which reflects their creditworthiness and trustworthiness for paying back loans and debts they owe. It is in a ranking system and ranges from 300–900. The higher the number, the lower the perceived risk is for people to lend money to you. Whereas the lower your score is, the higher perceived risk you are. Having a score of about 660 or higher is considered a good score. There are numerous things that affect your score. This can include things like your payment history, credit utilization, recent credit inquiries, and public records. Lenders associate the risk of lending your money based on your credit scores. You look reliable when you have a positive history, whereas it is concerning when they see negative results.

How to Improve a Credit Score

Many people struggle with bad credit, but there are some things you can do that will help to improve your credit score. We are going to go over the most beneficial ways you can be improving your score, so that you will get approved for your next loan.

On Time Payments

Being consistent and making your payments on time, or even before the deadline for things like your bills, credit cards, and loans is a huge and critical thing to be doing. This means budgeting your money in order to make sure there is enough to cover all your bills in your account. This is going to help you prevent missing any payments and allow you to maintain a good credit history.

Utilizing Credit

Do not go over your credit limit. This is going to help prevent damaging your credit score. Try to use less than 35% of the available credit. As this helps demonstrate that you are able to responsibly manage your credit and will thus enhance your creditworthiness.

Checking Your Credit

Try not to frequently check your credit with inquiries. If you do, it will tell lenders of your financial desperation. Frequently checking your credit can indicate you are constantly beyond your means to live and reflects badly.

Use Multiple Credit Types

You should have multiple credit types which you are using simultaneously. This can include things like loans, credit cards, lines of credit, and more. Managing all these responsibly will show diversity in your credit profile.

Contact Our Used Car Dealership

If you need a Car Loan Approval in Toronto, contact our dealership today! Go to our website to learn more about our financing and all our available used vehicles!