What you need to prove your income and work history may depend on the type of income you earn! If you have poor credit, proving your income and work history are key elements in qualifying for a car loan.
Proving your employment for a car loan
When it comes to employment history, many subprime auto lenders who help borrowers with credit problems require that you have had the same job for about six months to a year. They may also require that you have maintained a consistent work history for the past three years with no large gaps between jobs. A large deviation is generally classified as greater than 30 days.
Proving your current job can usually be done with a job verification letter from your employer. Your credit reports could also prove your work history, as the three credit bureaus – TransUnion, Experian, Equifax – often list your work history on your individual credit reports along with other personal information.
Lenders vary in their requirements, but when it comes to proof of income, they often require similar documents.
- If you have W-2 income, you usually need your most recent computer-generated check stubs from the past 30 days. They should show your cumulative income.
- Borrowers with an income of 1099, which typically includes self-employed or contract workers, may need two to three years of tax filing, and possibly bank statements.
- If you have unearned income like a permanent disability, alimony, or Social Security, you may need letters of attribution proving that you will receive them for the duration of the loan. You will also likely need bank statements proving that you have access to the income.
With a consistent work history and a steady source of income, you’re on your way to qualifying for a car loan.
What if I had a new job?
Lenders care about your employment history because they not only demand that you have enough income to pay off the loan, but also to see the likelihood that your income will hold up for the life of the loan.
If you’ve worked for your current employer for less than six months, lenders look at your employment history to determine how stable your employment has been in the past.
If you’ve been working in the same field for a while, a lender may be willing to accept your job and income. For example, let’s say you’ve worked in landscaping for five years, but took on another landscaping contract with a new employer about two months ago. Because you’ve stayed in the same niche, the recent job change may not be enough to put you out of the race for a car loan, especially if you’ve moved from job to job.
Need a bad credit auto loan?
Even if your income and work history tick all the right boxes for a car loan, a bad credit rating could ruin your vehicle financing opportunities. Here has Auto Express Credit, we’ve been connecting borrowers to Special Finance dealerships for over 20 years using our nationwide dealer network.
To be matched with a dealership in your area, complete our free auto loan application form. There are never any fees or obligations to purchase if you are logged into a reseller, so get started today!