Is Your Credit Score Good Enough to Buy a Car?
There are different types of credit scores. They may vary depending on lenders or kinds of loans, but they do, in fact, have similar guidelines. The lower the score, the lower are your chances of getting a loan or buying a car, especially with a low-interest rate. Are you planning on getting a car, but you worry that your credit score may not be enough? Well, not everything is lost. In 2017, 4% of all sold cars went to people with their scores being lower than 500.
Getting a car with bad credit
A bad score doesn’t necessarily mean that you don’t have any options at all, as there are loan providers who specialize in servicing people with bad credit. But you need to know – the worse your score, the higher the interest rate. For trustworthy borrowers with their credit score between 780 and 850 the average interest rate is 3,68% for a new car and 4,34% for a used one, but when you score below 500 it can go as high as 14,41% and 19,98% respectively.
But you have to know that if your score indeed is lower than 600-700, you’ll need to explain and document what led to that situation and how this time will be different. It’s much easier, even with a bad score, if you have a stable job, own a house or an apartment, and pay your bills on time. Prepare yourself for the presentation of positive aspects of your financial history.
If you want to know more about credit score, check out this infographic provided by Realistic Loans: