3 Ways Credit Affects Your Car Loan
When buying a new or used car, the first thought in most people’s mind is not, “Is my credit good enough, to get the loan I want?” You may know that your credit is good, bad or non-existent; depending on things that have happened in your life. You may not know how much this affects the car you want. It probably doesn’t come as a surprise to most people, but credit affects your car loan…
If you have a score of 700 or above, you are considered to be a “prime” candidate and can get better interest rates, higher loan amounts and more lenders to choose from. This is the ideal position to be in, when looking for a car loan. 550 or below is considered “sub-prime” making it difficult to get financing.
Unfortunately life happens… bankruptcies, job loss, and foreclosure can drop your score significantly. With a low score a lender is taking a higher risk to loan you money and many will not loan to you at all. Going back and forth with different lenders, can be an overwhelming and frustrating experience.
Having no credit score can be just as risky to a lender, as low credit. Because there’s no history showing that you’ve been reliable at paying obligations, they’re taking a leap of faith. Telling them, “I’m good for it!” won’t usually work in this situation. No credit is usually due to the fact that you’ve never borrowed money, or never had a credit card. Many lenders will give smaller amounts at higher interest rates, until you’ve built up a good track record. Although credit history is important, some banks are willing to give you a shot. There are a lot of great banks that will loan to people with no prior credit history. The trick is, knowing where to go.
Mark Miller Subaru’s Loan Center, understands all aspects of securing a good vehicle loan, no matter what your credit history looks like. Most people will be able to find an option, which will work for them. They can help you understand your situation and guide you to a lender that will treat you fairly. Once you’re approved, for a loan, you’ll be on your way to credit recovery and a better future.