If you know where your credit score is and what’s on your credit report you will be in a better position to know where you stand in your likelihood of getting approved and getting a good interest rate. The scores your lender sees should range from 300-850 with a higher score being better. There are multiple different credit scores floating out there for you so be aware that every lender you go to will say they have a different score for you. This is normal so don’t worry. Because you are applying for a car you will see some version of your FICO auto industry score. This score weights certain information on your credit report differently compared to if you applied for some other form of credit (credit card, mortgage, etc.).
What’s more important is what shows up on your credit report because that is what determines how high or low the credit score they pull will be. Lenders look to see if you are using all of the available credit you have on credit cards (hurts score), if you have a long credit history (helps score), if you have a history of using different types of credit (helps score), if you pay others back on time (helps score), and most importantly how your past auto loan history looks.
Your credit score will determine what interest rate you will get. Lenders will have different tiers that offer rates based on a certain range of scores. For example, anyone with a score of 600-650 may be given an interest rate of 8% and that rate will go up or down depending on what range your score is in. In most cases credit scores of 700 and up will get you an interest rate under 8%, the 600 range will be between 8%-12%, and the 500 range and below can have you paying up to a 25% interest rate.
You can check your credit score here with identity IQ for $1 if you want to see where you stand before you hit the dealerships.
William Frazier
NACC Certified Credit Counsilor
Clean Slate Credit
334-430-5296
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