If you are ready to purchase your dream car, most likely you might need an auto loan to help you in purchasing your ideal car. Purchasing a car is simple, but meeting the qualification to apply for an auto loan can be difficult, especially for one with a bad or fair credit score. This is more of the reason why before getting an auto loan to buy a car, you need to know what is a good credit score to buy a car. Therefore, in this article, we will show you the right credit score to buy your ideal car.
Everyone’s dream is to own a car and having a car gives you a sense of freedom. Applicants must meet the minimum credit score requirement to get eligible for an auto loan. There are different tools used to determine the right credit score needed to buy a car. Also, lenders do have their own set of requirements you must meet.
The interesting aspect is that if you don’t meet the required credit score set by the lender to buy your care, you can qualify for an auto loan through a co-signer with good credit.
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What Credit Score Range Tool Do Auto Lenders Use to Determine a Good Credit To Buy A Car
Just like I mentioned earlier, auto lenders set their own requirement applicant must meet. The most popular credit score range tool used by auto lenders to determine a good credit score to qualify for an auto loan is FICO Score. This the is most commonly used credit scoring tool used by top lenders. According to FICO, it serves as a general credit score with enhanced features of different versions.
VantageScore is another credit scoring tool, it’s a new competitor to FICO. However, the credit scoring range starts from 501 to 990 and the latest version of VantageScore starts from 300 to 850, the same as FICO does. FICO and VantageScore credit scoring model provides you with what a good credit score you need to buy care.
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What Is the Required Credit Score Needed to Buy a Car?
If you are talking about the minimum required credit score needed to buy a car, the FICO and VantageScore are used by auto loan lenders to determine the score. Through these, lenders divide customers into different categories according to their scoring range. This includes:
- Super Prime: 720 and above
- Prime: 660 to 719
- Near prime: 620 to 659
- Subprime: 580 to 619
- Deep subprime: 579 or less
One with a low credit score has a low chance of buying being able to purchase a car. If your credit score requires improvement or building, it might be harder to find a lender willing to approve a car loan.
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Use Co-signer to Buy a Car with a Poor Credit Score
Having a low credit score does not stop you from getting qualified for an auto loan. However, when you can’t acquire a car loan due to a poor credit score, you can use a co-signer with a good credit score to qualify.
Find a co-signer with better credit to qualify for an auto loan. However, this is not 100% advisable as you can only use it if it is your last option. The reason is that asking someone to co-sign on your loan basically means if you are not able to pay your loan, your co-signer will be the one to repay your auto loan for you.
How to Improve Your Credit Score Before Purchasing Your Ideal Car
Improve your credit score if you don’t have a good score required to purchase your ideal car. There are plenty of ways in which you can improve your credit score before thinking about applying for an auto loan. Here are the following ways_
- Ensure that you pay off your debt before the due date.
- Check your credit report and dispute if you find any mistake on your file.
- Pay down all your debt to the last as soon as possible.
- Avoid any hard credit checks.
- Also, avoid closing old credit cards no longer in use.
- Request for a credit increase on your credit cards.
Ensure that you follow these tips to improve your credit score in the long run. In addition, don’t miss out on any time and open new types of loans and credit as you need them.