How Do Credit Unions Verify Employment for Auto Loan?

Credit unions may verify employment before making an auto loan if it is their standard policy or if your credit situation warrants the verification. However, employment verification is not necessarily a requirement for an auto loan.

Function

When applying for a loan, employment verification allows the finance company to determine if they are making a smart financial decision by lending you money.

Types

If your credit score meets a certain threshold, which varies by lender but is normally around a FICO score of 700, you may get an "auto approval" from the lender, meaning that no further documentation for employment verification is necessary. If your score is lower or you have a lot of debt, employment verification may be required.

Identification

When required, employment verification is normally done by submitting a current pay stub or W2 to the finance company. If buying from a dealership, you may submit this information to the dealership, who will forward it to the credit union.

Considerations

Self-employed individuals may be ineligible for credit union financing if employment verification is required. However, established self-employed individuals with tax returns proving their income could have a chance, but it is necessary to submit proof of income.

Warning

If a credit union is requiring employment verification and you are unable to furnish it, do not provide forged pay stubs. Instead, look for other lenders with fewer requirements for credit approval. You may pay a higher interest rate, but they will help you build your credit.