There seems to be lots of confusion surrounding the credit score needed for auto loan, and this confusion almost always leads to poor choices by people looking to secure a loan. In this article, I’ll break down the facts about credit scoring and reveal the things are simply not true when it comes to auto financing.
Credit Score – The Facts
There are several ratings that lenders ascribe to any borrower. Typical gradations range from Good, Prime, Subprime, Bad and Poor. The fact is that each of these classifications have lenders that cater to them.
There are lots of subprime lenders and even more lenders who cater to people with a ‘Poor’ credit rating. Why? Because that’s the categories that many people fall into these days. The recession has taken root, people are loosing jobs everyday, so it’s no surprise that lenders have adjusted their lending policies to meet the new demands.
The simple truth is that anything else that you hear to the contrary is pure fiction. There is however a nuance that is relevant to credit scoring and I’ll explain this below.
Online Loan Applications – Special Score
As I mentioned above there is a lender that caters to every credit score or grade possible. The trouble is that these
lenders tend to operate differently. Online lenders for instance specialize in lending to people with subprime status but a minimum of 480 on the FICO credit chart is the standard for many online lenders. This doesn’t mean you won’t be able to find a lender that lends below this threshold, far from it. All it means is that you’ll have to look a bit harder.
In closing I’d like to reiterate the fact that no matter what your credit score, there is an auto loan out there for you. Online lenders are a bit more picky in terms of FICO score but there are still plenty online lenders to choose from. Most online lenders will give you a quote with only a few personal details supplied, so you really have nothing to lose by giving a few a test drive.
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