What's A Good Credit Score For An Auto Loan?

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, - May 27, 2016

As is the case with almost any financial transaction, having a good credit score is vital to securing the best terms and interest rates for an auto loan. Before you set out to purchase a vehicle it’s an excellent idea to review your credit report, to see if you have the scores needed to secure auto financing at a decent rate. But what exactly is a good credit score for an auto loan?

The answer quite simply is, it depends. What might be considered an 'excellent' credit score by one lender might only qualify for 'good' credit by another lender with a more conservative car loan approval standard. The amount of financing that is being sought for an auto loan can also sometimes have an impact on how credit scores are interpreted by lenders.

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Generally speaking, credit scores above 760 are considered 'excellent' by almost all lenders. Anyone having credit scores in the 760 and higher range should have little trouble finding lenders willing to give them auto loans at interest rates reserved for the most creditworthy customers. Individuals with 'good' credit scores of between 720 and 760 should also find it easy to secure auto loans at excellent interest rates and conditions. It’s when scores start approaching the 700 mark or so that lenders will begin charging substantially higher car loan rates. Those with credit scores below 700 are very likely going to be unable to secure an auto loan, or will have to turn to sub-prime lenders.

In the current economic climate, obtaining auto loans is becoming harder than before. Lenders have become a lot more stringent in their creditworthiness requirements. Unless you have a credit score of something in the range of 720 and above, it might be a good idea to first work on improving your score before seeking an auto loan.

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