Minimum Credit Score Required for an Auto Loan

Getting an auto loan is not as easy as it once was. This article will contain information regarding the minimum credit score that is required for an auto loan and how people can go through this process. Often, it can be a daunting and overwhelming process in trying to find a car, and then finding an auto loan to finance that car. This article will seek to ease the stressful process of getting an auto loan by serving as an informative guide.

Typically, a person can get an auto loan with a minimum credit score of 500 or above. While a person can get an auto loan with this minimum credit score, there are other parts of the process that will be made more difficult.

Credit Scores to Obtain the Best Auto Loans

For the best loan rates, a person must have a credit score of at least 720. Only a few months ago, the credit score was 700 for getting the best loan rates. With the best interest rates, a person will usually have to pay about 5.9% in interest rates on an auto loan. But, the sad truth is that consumers with the lowest credit scores will have to pay about 12.5% in interest rates on auto loans.

Before going to a dealership or taking out an auto loan, a person can do many things to immediately improve his or her score. A great way to improve one’s score immediately is to pay off any high bills before going to the dealership. By doing this, your score will improve and dealerships will look favorably upon your auto loan application.

Paying a large upfront down payment on the car. Auto dealers will take this as a sign of good faith that you can pay your loans and would be willing to offer some financing.

Before going to a dealership, it also helps to try to get pre-approved for an auto loan. This can help save much time and frustration when you are at the dealership. If your credit score is lower, but you can find another company that will finance your auto loan, this will greatly improve the odds of you receiving a favorable interest rate from an auto dealership. Other great places to look for auto loans are credit lenders and your local bank.

Getting an auto loan may get more difficult in the future, so it pays to take advantage of time now and get an auto loan with a credit score even as low as 500. If you have a good down payment to bargain for the loan and can show good employment strength, you might just get that auto loan.

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