Car sales have plunged over the last few years and that’s good news for anyone trying to buy a new or used vehicle. The credit score you need to get a loan has decreased and rates are still low.
FICO uses information from your credit report to assign a score from 300 to 850 and reports that 90% of car lenders use their score.
The average credit score for a car loan is 714 FICO for a new car and 655 for used but that’s average so it’s going to be much higher than the minimum.
You can definitely get a car loan with bad credit. As mentioned, auto lenders and everyone else in the industry are pushing to open up to more customers.
For the borrower with fair credit and a 10% rate, the payment would come to $318.71 per month. For the bad credit car loan at 18% annually, the payment would be $380.90 a month.
1. Pay off your credit cards or at least pay them down to less than a third of your limit 2. Do not close any credit accounts or apply for a loan within a few months
1. Apply to at least three lenders to make sure you’re getting the best rate available 2. Don’t go to buy-here, pay-here dealers.