Posted by Bouton Adalie on Sunday, 8 September, 2019 05:35:48
Let's start with the good. If your credit score is above 700, you can probably expect to receive a 5 percent interest rate. As your credit score drops, your rates will creep up—and once you hit 500 or lower, your interest rate will probably be around 15 percent or higher; yikes!
It's common knowledge that getting financed for a car depends largely on your credit score — usually your FICO score, which is used by the vast majority of lenders.. What many people don't realize, though, is that there's a special FICO score specific to auto lending.
For other financial products such as personal loans, student loans, and retail credit, FICO ® Score 8 is best. This is the credit score most widely used by lenders, and they may pull your score from one or all three bureaus when making a decision.
When buying a car most people don't know their credit score is not used to determine their car loan. Instead, a different score is used. It's something called an Auto Industry Option Score ('Auto Credit Score'). This auto credit score is usually calculated by FICO exclusively for use by auto lenders to determine your loan qualification
When you apply for a car loan, your credit score plays an important role, just as it does when you apply for a credit card or a mortgage. That said, the credit requirements for auto loans can vary considerably among different lenders.
Interest rates: The interest rate you'll get depends on your credit score and income, the length of the loan you choose and the vehicle. If you have a loan and make consistent, on-time payments and your credit score improves, you may be able to refinance your car loan to get a better rate and lower your monthly payment.