What Is The Lowest Credit Score You Can Have To Buy A Used Car?
If you are in the market for a used car near you, you probably understand that most dealerships utilize credit scores when determining eligibility for auto loans. Depending on your credit score, you may feel confident about financing a car, or you may be unsure. If you are unsure, you may be worried about your credit and whether or not you will qualify for an auto loan. In this case, you are likely questioning the lowest score you can have to buy a used car. Fortunately, we at USA-1’s buy here pay here car lot near Fort Wayne have a thorough understanding of credit and how it factors into auto loans. Therefore, we’ve put together a list below to help inform you about the credit score required for car financing.
1. Credit Tiers
The first things you should know about before financing a used car near you are the credit tiers dealerships use in determining loan eligibility. Every credit tier consists of a range of credit scores that greatly influences the interest rates on auto loans for new and used cars for sale. The higher your credit, the better the tier and the more perks you receive. The following list details every credit tier along with the range of credit scores and the average interest rates for each according to Experian:
- Superprime (781-850): 3.61%
- Prime (661-780): 5.38%
- Nonprime (601-660): 9.8%
- Subprime (501-600): 15.96%
- Deeper Subprime (300-500): 19.87%
2. Benefits Of Good Credit
While you are shopping with USA-1’s buy here pay here car lot near Fort Wayne or any other dealership, good credit can go a long way in saving you money and getting you financial benefits. As mentioned in the list above, a high credit score means low interest rates on used cars near you. Additionally, good credit makes getting pre-approved for a loan simple and easy. Good credit may also benefit you when negotiating auto loan terms.
3. Minimum Credit Score
Whether you are shopping for a used truck for sale or a new sedan, most dealerships need to look at credit scores when determining financial eligibility and loan terms. In truth, there is no minimum credit score required for getting an auto loan; however, you may find it challenging to qualify for a loan if you are in the deeper subprime tier. In some cases, you may have to get a co-signer if you have poor credit.
4. Bad Credit Solutions
If you are struggling with poor credit, you might be having trouble getting approved for an auto loan, as mentioned above. Luckily, there are solutions, such as USA-1’s buy here pay here car lot near Fort Wayne. Dealerships that offer buy here pay here near you specifically cater to buyers with bad credit, using factors besides credit to determine loan eligibility, like income-to-debt ratio or employment status.
5. Improving Your Credit
Suppose you find the perfect used SUV for sale near you, but you have low credit or fall just short of a higher credit tier. In this scenario, it is likely that you want to improve your credit before purchasing your desired SUV. With this being said, the following list describes a few actions you can take to improve your credit before making the significant financial decision that is buying a car:
- Pay off past-due accounts
- Reduce revolving debt
- Pay bills on time
- Ensure an accurate credit score by checking your credit report
- Keep old accounts openLimit credit card and loan requests
To conclude, at USA-1, we want to ensure your success as a car buyer by keeping you well-informed. Thus, we hope that this list helped you to better comprehend how credit is associated with car loans. If you have any additional questions about financing a vehicle, you can contact us at USA-1 or any dealership near you.