Often, after a divorce, a person’s credit suffers and you might find yourself in need of a bad credit auto loan. If you have child support payments going out or coming in, you may find yourself having an additional obstacle to hurdle. If you are paying, it will affect your debt/income ratio. If you receive payments, child support can not be garnished, so lenders could be skeptical of your ability to pay.
Second chance auto loan specialists may consider originating a loan with child support under certain circumstances.
- If your income is high enough to show a positive debt/income ratio after child support is deducted.
- Your income from another source is high enough to be garnished if you default.
- If your bad credit is situational, like from your divorce, instead of habitual.
If you have a habit of ducking your child support, you will not get approved for a second chance auto loan. Judgments for delinquent child support appear on credit reports. The logic is that if you will not pay for your children, you will not pay for a loan.
Child support directly affects your ability to get a loan. Your best chance of getting approved lies directly in stability. Stable payments made, stable income other than child support, and a stable home. If you stay the course, your credit can recover from a divorce and child support.