Lenders look at more than your credit score. If your credit has taken a hit — or you’re new to Canada and haven’t built a history yet — there are still practical ways to get approved for a car loan.
1. Know where you stand
Check your credit reports from Canada’s two credit bureaus, Equifax and TransUnion. You can request them for free. Fix any errors before you apply.
2. Show stable income
Lenders want to see that you can make the payments. Have recent pay stubs, an employment letter or, if you’re self-employed, tax documents ready. The longer you’ve been in your job, the better.
3. Put money down
A down payment — even a modest one — lowers the amount you’re borrowing and shows commitment. A trade-in counts too.
4. Pick a vehicle that fits the budget
Approval is easier on a reliable, sensibly priced vehicle than a stretch purchase. Aim for a payment you could still make in a tough month.
5. Consider a co-signer
A co-signer with strong credit can help you qualify or get a better rate. Make sure they understand they’re responsible if payments are missed.
6. New to Canada? Bring your documents
Some lenders have programs for newcomers. Your permit or permanent resident documents, proof of employment, a Canadian bank account and proof of address all help.
7. Use the loan to rebuild your credit
Every on-time payment helps. After 12 to 24 months of on-time payments, you may be able to refinance at a better rate.
Watch out for
- Applying with many lenders at once — multiple hard credit checks in a short time can lower your score. Working with a dealer that submits to several lenders on your behalf can help.
- Very long terms that keep payments low but cost much more in interest — see our rate and term examples.
- Anyone asking for your SIN or banking details by text or email.
We work with a range of lenders, including programs for rebuilding credit and for newcomers. Apply online — it takes about three minutes and doesn’t affect your credit score.