Good Credit Score for A Car Loan

October 26th, 2021 by
Hand Holding Phone with Credit Score on Screen

Photo from Song_about_summer –

An important factor when it comes time to buy a car is your credit score. Your credit score impacts what sort of loan you can get and sometimes even affects whether you can get a loan at all. Therefore, it’s important to know what your credit score is before you head to the dealership. By knowing your credit score and how it impacts your auto loan options, you can make a better decision about your finances and the car you buy.

What Is a Good Credit Score for a Car Loan?

When you find out your credit score, you’ll likely see a number somewhere between 300 and 850. This is known as your FICO credit score and it takes into account a lot of factors. While there are always other factors at play, generally speaking, a credit score above 670 is typically good enough to secure an auto loan from any institution. The higher your credit score, the better your chances and the better loan terms you’ll get.

That being said, even if your credit score is below 670, it’s still possible to get an auto loan. You can do this either by improving your credit score or by searching for a location that grants loans to people with lower credit scores.

How To Improve Your Credit Score

Improving your credit score is a good goal, even if you decide to purchase a car right now. Having a good credit score makes a lot of things in life a lot easier, such as buying a house, renting an apartment, and buying a car. Luckily, there are some simple things you can do to work on your credit score.

To start, you should focus on paying off any outstanding debts. A big part of your credit score is your debt-to-income ratio. If you can lower your debt, it will help to slowly raise your credit score. Research your options if you’re having trouble paying off your debts, such as restructuring the payment plan with your lender or getting a consolidation loan.

The next thing to focus on is making all payments on time. This goes for any loans you have, along with payments towards things like your credit card, rent, and cell phone bill. Late and missed payments can have a significantly negative impact on your credit score so it’s important that you do this as little as possible. If you have trouble remembering when your payments are due, consider setting yourself a reminder or setting up automatic payments.

Finally, if your credit score is low due to a lack of credit history, you’ll want to work on building that up. A simple way to do that is by signing up for a basic credit card. Find a credit card service that provides cards to those with little credit history. Then, use your card every once in a while, ensuring that you pay off the balance on the appropriate date. This is a good way to start demonstrating to credit reporting agencies that you can be trusted with credit and that you make your payments on time.

Getting an Auto Loan With a Low Credit Rating

If you have a low credit rating and don’t have time to improve it before buying your next car, don’t worry. It’s still possible to get an auto loan with a low credit rating. Start by looking for a dealership in your local area that caters to buyers with low credit ratings. These locations typically have their own financing operation, allowing them to provide loans to those with lower credit scores. Discuss your financial situation with the dealership and they will likely be able to tell you if they can approve you for a loan.

To give yourself a better chance of securing a loan, try to make a larger down payment on your vehicle. A larger down payment means you don’t have to borrow as much to pay for the car. Since you’re not borrowing as much, lenders are more likely to give you the loan you need. Saving up a little extra and putting as much as you can towards the down payment can make a big difference, not only on your ability to secure a loan but on how much you’ll end up paying in interest by the end of the loan.

Let North Coast Auto Mall Assist You

No matter your financial situation, North Coast Auto Mall in Cleveland, Ohio, is here to help you. We specialize in helping buyers with low credit ratings or a lack of credit history get the auto loan that they need. Our dealership is a Buy Here Pay Here dealership, meaning we don’t rely on an outside financing partner. We have in-house financing, giving us more freedom over who we lend to.

In addition, we are able to offer some of the best used car prices around. This is because we buy our vehicles at auction for less than wholesale and then pass those savings onto our buyers. By getting a less expensive vehicle, you don’t have to take out as large of a loan, saving you money in the long run and improving your chances of getting approved.

Whether you have a credit score of 850, 300, or something in the middle, North Coast Auto Mall wants to help you get your next vehicle. Get started today by browsing through our current inventory online. We do our best to update this inventory regularly and to ensure accurate descriptions of all the vehicles. Once you find something you like, contact us to schedule a time to come into our dealership. From there, we’ll set you up with a test drive and start the process of getting you an auto loan.

Don’t let your poor credit score or lack of credit history keep you from getting a new car. Through North Coast Auto Mall it’s easy to get the car you want with an affordable auto loan. Contact us today to get started and we’ll have you behind the wheel of a great new car in no time at all.

Posted in Auto Finances