Your dream car is more than simply a set of wheels; it represents your hard work and dreams. However, when it comes to purchasing your dream car, your credit score is crucial.
Lenders look at your credit score to determine how likely you are to repay a loan. This means that the better your credit score, the better your interest rate and terms.
Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. While there’s no specific “magic number” required to buy a car, the following credit score ranges can provide a rough roadmap:
“What credit score do I need to buy a car?” you may be wondering. Buckle up, because we’re about to take you through the world of vehicle financing and credit ratings.
What Credit Score Do I Need to Buy a Car?
To be eligible for a traditional vehicle loan, you typically need a FICO credit score of at least 600, though the minimum credit score needed will vary from lender to lender.
It may become more challenging, but not impossible, to obtain a subprime auto loan as interest rates rise as a result of inflation. This is how you can check if your credit score can be used to buy a car
Excellent (750 and above): You’re in pole position, likely qualifying for the best loan terms, including lower interest rates.
Good (700 – 749): You’re cruising comfortably, and still eligible for favorable loan terms and competitive rates.
Fair (650 – 699): You might encounter some speed bumps, but auto financing is still accessible, albeit with slightly higher interest rates.
Poor (600 – 649): You’re on a challenging course, and while securing a car loan is possible, expect higher interest rates and potentially stricter terms.
Very Poor (below 600): The road gets steep here. You may face difficulty obtaining an auto loan, and if approved, interest rates could be significantly higher.
More Contents on Credit Score
The Complete Guide to Understanding Credit Scores
Why Having a Good Credit Score Is Important
Why There Are Different Credit Scores
What Affects Your Credit Scores?
How Do I Improve My Credit Score?
Where Can I See My Credit Score?
What Credit Score Do I Need to Buy a Car?
Can You Get a Car With Bad Credit?
What Credit Score Do I Need to Get a Good Deal on a Car?
Why Is a Credit Score Important When Buying a Car?
What to Do if You Don’t Have a Credit Score
Monitor Your Credit Report and Score