What Is A Decent Credit Score To Buy A Car?
Your credit score when buying a car
If you’re hoping to buy a car, but don’t want to go through the trouble of paying cash for it, you might think about getting vehicle finance. And, while some people can jump right in and apply for one at their preferred dealership, other people decide to simply ask the bank for some assistance.
Banks are well aware of this situation, however, which is why some are now offering special cards just for new customers that may not have any prior credit history. There are other options to improve your chances of qualifying for credit.
Besides knowing your credit score, there are other factors that will affect whether or not you get approved for the new car that you want.
Good credit equals lower costs
The interest rates you pay on your car loan will depend largely on your credit score, so you''ll want to know what kind of rates other people are getting before you start searching for financing. If you have a score of 661 or higher, chances are good that you''ll be able to get an annual percentage rate that''s either close to 3.48% or less if you''re buying a used vehicle.
A good credit score
The people who review your application for a car loan look at how much you earn and the history of your credit. Lenders have a way of organising the customers they deal with, putting them into categories based on similar data. This makes it easier for them to decide whether or not to give someone a car loan. A good credit score will get you the most preferred loans and interest rates.
Can you buy a car with a poor credit score?
If your credit score is below the ‘good’ range, you may still be able to get an auto loan – but it will be harder and more expensive. The best thing to do is:
- Be willing to pay a higher interest rate.
- Find a dealer that specialises in buyers with poor credit.
- Apply for a loan with a co-signatory.
Buying a new car is a major financial commitment, and one that many people continue to struggle with. Buying a car with a low credit score can be a risky endeavour, as you might end up paying more for your car. Get in touch with Credit Health and we’ll help you choose the right vehicle finance solution for your situation.