Shopping for a reliable vehicle? One of the first things you’re likely to explore is what’s considered the minimum credit score for a car loan. If you’ve had trouble with your credit score in the past, this can be a source of real worry. Getting a car loan doesn’t have to be a frustrating process, even if your credit is less than perfect. The key is knowing what lenders are looking for and how to address their concerns. All lenders look for different things, and understanding exactly what a lender needs to see as a good credit score for a car loan can help you get the financing you need.
What Credit Scores Mean
If you have a credit score of 400 – 559, you’re considered to have bad credit, and many lenders might reject you. Those who don’t will be charging higher than average interest rates. Make sure you only opt for these kinds of loans if you need to repair your credit or you simply can’t live without dependable transportation. If you have a credit score of 560 – 649, you’re considered to have subprime credit.
Again, you can expect to see higher interest rates, but you’ll find a lot more choice in a loan like this. Because of the high interest rate, though, you’ll want to pay a loan like this off as soon as possible. With a credit score of 650 – 699, you have a fairly average credit score. You typically have the ability to shop around for the best APR with a score like this one, so be sure you do your research and compare lenders. Once your credit score hits 700 – 749, you can shop around a bit for a car loan.
Almost any bank will offer you a loan, and you may find lots of different benefits and term choices. You can even choose from shorter loan terms or higher monthly payments. Excellent credit begins at a score of 750 and ranges up to a credit score of 850. In this range, a loan should be fairly easy to get, and you can expect solid terms and low interest rates.
More than Credit Score
If your credit score isn’t what you hope it should be, you may be tempted to try to buy a car from a car dealer that offers quick financing from their lot. This isn’t always a good idea, though. Dealers like that don’t always have your best financial interests at heart, and they’re only trying to sell cars. That may also mean that you miss an opportunity to build your credit history with a reputable lender. Thankfully, you needn’t worry about this when you’re working with the experienced finance professionals at Palm Beach Auto Sales Outlet.
Remember, You Can Rebuild!
If your credit score isn’t what you’d like it to be, you can rebuild it so you can qualify for lower interest rates. You just need to lower your debt to credit ratio as much as you can, make every monthly payment on time, and make sure all of your open accounts are in good standing.
Shopping for a car loan doesn’t have to be a frustrating process. Instead, it can be an opportunity to get the help you need.
