Why is My Credit Score Important?

It's best to think of your current credit score like a financial snapshot. When applying for an auto loan, lenders will use your credit score to help determine how much you can reasonably afford.

To make a fair assessment, they use what's called a "FICO" score. This metric gathers information about you from five distinct categories, including:

• Payment history
• Amounts owed
• Credit history
• New credit
• Credit mix

Is There an Ideal Credit Score for Auto Loans?

Over the years, your score will fluctuate, but with discipline and careful planning it should trend upwards. While there's no minimum credit score to apply for an auto loan, the average American driver applying for a new loan tends to have a score that hovers somewhere around 700.

Naturally, the higher your credit score, the easier it'll be to secure favorable terms. A score above 780 will put you into the "prime" category, unlocking the best interest rates for both new and used cars.

If you're score currently sits somewhere below these numbers, don't fret. Depending on your situation, our specialists can devise a strategy that'll secure a loan that fits your monthly budget.

How Do I Get a Loan With Bad Credit?

If you can afford to wait a little bit before signing on the dotted line, there are a few steps that can increase the likelihood of securing a decent auto loan. These include:

Clean Up Your Credit

It's best to walk into any financial venture with a clear vision. If it's been a few years since rummaging through your FICO score, we suggest going over it with a fine-toothed comb.

Inaccuracies and unresolved issues can needlessly drag your score down. Disputing these errors can potentially lift your score as well as aid your long-term financial health. There are several third-party sites including Experian and Equifax that can help.

Build A Down Payment

While no money down can be a sweet perk, it requires the dealership to assume more risk. Meanwhile, offering money up front not only alleviates some of the risk; it also reassures the lending agency you're willing and able to make timely payments.   

Make a Trade

Don't have extra cash to put down? Consider trading in your car, truck or SUV. Use our Value Your Trade tool to receive a fair-market estimate. You can use the value of your current vehicle to put towards paying off your next one.

Extend Your Terms

The typical American driver keeps their vehicle for about 5 to 7 years. Extending your auto loan to 60 or 72 months will help lower your monthly payments. This has the potential to offset a higher interest rate caused by a less-than-stellar credit score.