Well, you are looking to finance a new car or may be you are looking for a good used car. However, one of the major requirements when you are trying to finance your new car is to check your credit score. In addition to deciding what rate of interest you will be charged for your new purchase or even to decide whether you really are qualified for a new car loan.
If you are someone with a good credit score, it would be quite easy for you to get a new car. In fact, you will be able to get the best possible rates. A car loan with 650 credit score may not be quite easy to get as such, or you may be charged an exorbitant rate of interest. That should not necessarily mean you will not get a suitable car loan. In fact, the car vendors are desperate to sell you their products. However, having access to a good credit score can be trouble free option for financing your car loan.
Take note of these Points before you take a Decision on a Car loan
If you are looking to answer the question “What Credit Score is Needed to Buy a Car,” there are a few things you need to take a note of. The points will also hold good for any queries you may have with respect to 650 credit score auto loan requirements.
There are NO minimum Credit Score criteria
Yes, there is a MINIMUM CREDIT SCORE specified by any bank or financial institution as such. Thus the query does not have a simple and straightforward answer to this question. While a lower credit score may not deny you a car loan as such, you will get better deals and benefits if your credit score is higher enough.
That means if you have a credit score of 650 car loan cannot be denied to you, but you may not be able to get better options. In fact, the actual credit score depends on the dealership and lenders. In any case, most of the dealerships prefer a minimum credit score of 620 and somewhere around it. That would mean 650 credit score car loan should not be a difficult task for you. In fact, some of the lenders and dealerships should be willing to discuss things with the borrowers with poor credit scores.
Ensure that you are presenting them your FICO scores rather than sharing the credit scores from other credit bureaus. A FICO credit score of 650 to 799 is treated to be average to good and may be a great option for obtaining a good credit score.
Go with Car Dealerships and lenders who specialize in bad Credit score
If you find your credit score is in the sublime level – that is under 620, and major dealerships and lenders are not willing to provide you a car loan, it may be a good idea to consult the lenders that specifically deal with the individuals with lower credit scores.
Auto Credit Express is perhaps one of the most preferred options when it comes to bad credit auto loans. In fact, the company can provide you a car loan – whether used or new – even if you have a history of bad credit, no credit, bankruptcy or repossession. They are one of the best Auto lending platforms and specifically designed for people with financial issues. Car.Loan.com is yet another good option to help you out in providing you better 650 credit score auto loan interest rate.
Don’t go for Lease if you have a bad credit score
A lease can be an attractive option as it helps you with lower payments per month. However, it may not be a good idea if you have lower credit scores. However, this can have more downsides than offering you benefits when it comes to leases if you have a credit score of 650 or less.
Most of the companies do not opt to lease a vehicle if you are someone with a low credit score. In fact, getting a loan would be easier than getting a lease. Even if you are successful in getting one, you may be charged a higher interest rate or may even be asked to pay a higher down payment.
How can a Credit Score affect the terms of your car loan?
Ideally, a 650 credit score car loan interest rate would be considerably higher. The average or lower credit score will translate into a higher rate of interest on your loan, in addition to a higher down payment. In fact, the car that you would be financing through the loan would eventually cost you more in the long run.
If you have a FICO credit score of 720 to 850, dealerships and lending companies consider it the excellent. They will ideally be charged at around 3 to 4 percent, while those with a credit score of 650 or less may be charged at around 14 to 15 percent.
Ideal charges would be as per the following table –
However, it may not be quite easy to experience a jump from a lower credit score to a higher credit score. However, if you can manage a few slight changes over the years to improve your credit score, it can have a good effect on your car loan and the payments thereof over the tenure of your car loan. In fact, you can even attempt bringing your credit score to somewhere around 620 to 650. The 650 credit score car loan interest rate as can be seen from the above table are impressive enough.
Improve Your Credit Score
Improving your credit score would be one of the ideal options to enhance your chances of getting better deals on your car loan. You should have understood by now that a good credit score will be helpful in getting a few excellent deals on your car loan and you would be able to save enough.
However, improving the credit score is not an overnight process. One of the excellent options you can put to use is to make use of credit repair service. There are a few good credit repair services that can be helpful enough in getting a good credit score. Lexingtonlaw is one of the good options and can help you with a free consultation of personalized credit. They will also review your credit history and recommend proper solutions. Creditrepair.com is yet another option that can be a good option for repairing your credit score.
Anything you should take care of Before you shop for your car loan?
Well, the credit score between 501 to 600 is treated as Subprime while that between 601 to 660 is referred to as non-prime. If you fall under any of these two categories, it may be a good idea to take care of a few factors with a view to enhance your credit score. This will help you get the best financing options for your new car.
Some of the options you would find interesting and practically useful can be
- Make sure you are paying your bills on time. Make this a habit every time you have any bills to pay.
- Let your credit balances be at lower levels enough. This will ensure that you will have an excellent credit score or have a chance to improve your credit score.
- You can open a new credit only when you have any need for the same.
Keep checking your credit scores to check if it has any errors. In fact, keeping a check on your credit score should be one of the important aspects to take care of even if you have a high or excellent credit score.
The Concluding Thoughts
Well, it should not be difficult to get a new car loan if your credit score lies below 650 or somewhere between 650 and 699. Of course, a 650 credit score car loan interest rate would be slightly higher and may not offer you the best of the terms. Even then, opting for a few companies and dealerships that offer you the best credit options can be one of the excellent options you can opt for.
In any case, if you are not in a hurry to buy a new car as of now, you can postpone the idea for a couple of months and focus on improving your credit score. A credit score above 660 should be the best options if you are not able to reach an excellent level in such a shorter time period.
Just take a wiser decision and opt for the best deals that meet your needs. Just try improving your credit scores if you really want to get the best interest rates and better deals.