When it comes to auto loans, your credit score can often determine the terms of your loan. But what if your credit is really low, like, deep subprime, low? Here's a look at what a deep subprime credit score looks like and what it means when it comes to your chances of getting financed for an auto loan.
How low is deep subprime credit? Deep subprime typically refers to someone with a credit score below 580. This is also considered bad credit or having credit in the poor credit score range. No matter what you call it, this is the lowest category on the FICO credit scoring model, and around 30% of Americans fall into this or another subprime category.
There are five credit score categories, and they go from 300 to 850. The better your credit, the better rates and terms you typically qualify for on a car loan. This also means that borrowers in the deep subprime category may have more difficulty qualifying for things like loans, but it's far from impossible.
Is a car loan possible with deep subprime credit? Yes! Auto loans are possible in this credit category as long as you're working with the right lender. Working with a bank or credit union may not be the route to go with a low credit score, and you may find it easier to work with a subprime lender that knows how to work with borrowers in challenging credit situations. These lenders work with bad credit borrowers, they look at more than just your credit score to help qualify you for a car loan.
While a credit score is important on a car loan, it's not the only factor. Subprime lenders take into account your ability to take on a loan, your overall financial and residential stability, and other variables such as payment history. This may influence how large of a down payment you need to put down on a new or used car. To prove these things to a lender, you typically need to meet several subprime auto loan requirements.
Since the average interest rate for a bad credit car loan may be higher than you expect, you may also want to consider adding a cosigner or buying a cheaper vehicle to boost your chances of getting financed with deep subprime credit.
Get your next auto loan. Now that you know deep subprime auto loans are possible, it's time to find a lender to work with. Rather than searching every dealership in the area for one that works with subprime lenders, start here instead. At CarsDirect, we work with a coast-to-coast network of special finance dealerships that are signed up with subprime lenders. Let us get the ball rolling by connecting you to one in your area. Simply fill out our fast, free, car loan request form to get started.