Employment Length and New Car Loans

Employment Length and New Car Loans
  • Opening Intro -

    How long do I have to be employed to qualify for a new car loan? That is a reasonable question that many car buying consumers ask.


After all, lenders look at a number of factors when underwriting a loan including your employment history. Still, it is possible for you to get a new car loan even if you just started out at a job. Read on and we will look at several factors lenders consider when weighing your new car loan application.


It is possible to apply for a new car loan the moment you begin to work at a new job. However, lenders may prefer that you have employment history under your belt before approving your loan.

For instance, at the Coors Credit Union in Colorado, there is no minimum to apply for a loan, but its lending manager prefer that you have completed at least six months of employment. You can help your cause if that job is with the same employer.

Other Factors

Besides employment history, your credit score is an important factor in lone underwriting. Also known as your FICO score, it is the standard credit score used throughout the United States with more than 90 percent of lending decisions based on that score.

Your score consists of five important ingredients: payment history, amounts owed, length of credit history, new credit and types of credit used. The same weight, however, is not given to each category as payment history makes up 35 percent of your score and your amounts owed 30 percent. Your length of credit history is 15 percent while both your new credit and the types of credit used are 10 percent each.

FICO, however, notes that for some consumers one factor may have a greater impact on their credit score than others. Your payment history and the amounts owed on credit may be good, but your length of credit history may be a brief one, therefore the credit history category could loom large. How long you have worked at a job is part of that history, information that shows up on your credit reports. Your credit score is based solely your credit reports.

Credit Reports

With your credit reports impacting your credit score, you should review your reports at least once annually. These reports contain a lot of personal information about you including your name and home address, your Social Security Number, your credit accounts, your credit history, the types of accounts you possess and your employment history. That latter category should be correct, but credit reports do oftentimes contain outdated or wrong information. Wrong information needs to be corrected as it can lower your credit score and make it more difficult for you to obtain a new car loan.

You can obtain all three of your credit reports from the credit reporting bureaus: TransUnion, Expedia and Equifax. Moreover, if you obtain your reports through AnnualCreditReport.com, then you can get each one free once annually. It is a good thing to check up on your reports, spot mistakes and notify the credit bureaus. Each bureau has 30 days to fix the problem once notified otherwise the information is automatically expunged from their records. Once your credit reports are clean, then head over to MyFico.com to obtain your revised credit score. That’s the score lenders will use and what can play a huge factor in helping you get a new car.

Loan Considerations

Perhaps the initial question — how long do I have to be employed to qualify for a new car loan? — should be answered with another question: do you know what is in your credit score? For your credit score will impact your ability to borrow as well as for finding favorable terms including a low interest rate on your new car loan. Always obtain your credit score before applying for credit to understand how much of a risk you are to lenders.


Coors Credit Union: How Long do You Need to be Employed to Get a Car Loan? — http://coorscu.wordpress.com/2009/06/25/how-long-do-you-need-to-be-employed-to-get-a-car-loan/

MyFico: How My FICO Score is Calculated — http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

Author Information

Jenny Sampson is a professional blogger that enjoys providing consumers with personal finance advice. She writes for TitleMax, a leading Title Loan company offering loans for people with bad credit.


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