What credit score is needed to buy a car ?
When it comes to buying a car and getting the best leasing, there are a few very important factors to consider. What credit score is needed to buy a car is one of the main ones. You also need to think about how it will impact your budget, how much you can afford per month, and how it will affect your debt to earning ratio?
Unless you can afford to pay for a car in full and up front, you will need a loan. To qualify for that loan, the most important aspect, aside from income, is your credit score. The big question is; what credit score is needed to buy a car? There are a few answers to this, as your score not only affects if you will get the loan, but at what quality financing you will get it at.
The higher the score the lower the interest
So, what credit score is needed to buy a car? Generally speaking, if your score is 740 or higher you will always get the best rates possible. This means the interest is only between 3-4%. If your credit score is lower, between 739- 680 or so, you are likely to still qualify but at slightly higher interest. As long as it’s around 680 or higher, you can except reasonable rates between 4-5%.
The reason a high score is so important is that it shows you are capable of fulfilling your debts. Credit is built on acquiring debts and paying them off. Things such as utilities, loan payments, and other bills that required credit rating can impact that rating. Credits cards are one source that can either be extremely helpful in building good credit or very detrimental if not kept up with.
Can you buy a car with poor credit?
When it comes to minimal, what credit score is needed to buy a car then? Depending on the standards and policies of the dealership, you may not need any at all. However, people with scores generally below 680 can pay some dramatically steep amounts of interest. Loans for low credit or bad credit ratings tend to have interests between 6% to over 12%. Places in particular that offer to do their own financing with weekly payments and no credit score requirement tend to cater to those with poor scores but also charge a great deal of interest.
Find out what your credit score is before purchasing
There are a lot of credit monitoring services available online. From a simple one time check to low cost continuous monitoring that you pay a month rate to use. Sites like Quizzle offer regular credit reporting, tools, and advice on how to improve your score for $8 a month.
The best advantage you can have in buying a new or even used car from a dealer is knowing what credit score is needed to buy a car from them. While the listed figures are averages, you may find each dealer has different standards and requirements.