America is a big place, and for most of us a car is our main means of transportation. When you set out to purchase one, you might have to figure out just what credit score is needed to buy a car. There are a lot of different things to understand here, and it’s not that simple. If you’re wondering what credit score is needed to buy a car, you’ll want to look a little deeper.
First, you should understand that every bank and lender will have different requirements. There are also loans offered directly from auto manufacturers since they have their own lending companies. According to recent figures, Ford lenders require a score of 640 or above. Honda and Toyota financial services, however, will consider you for a car loan with a score of at least 580.
For many who don’t have great credit, a ‘buy here pay here’ used car lot is often an attractive option. It can be
worth looking into, but remember the following:
- • Many of these places have much higher interest rates than normal loans.
• Many also won’t actually report to credit agencies, which means you won’t be improving your credit by buying from them.
• The repayment terms and late payment penalties can often be very expensive as well.
Another option is to head to your bank directly. Many banks – especially credit unions – offer auto loans that are much easier to qualify for than loans from auto companies. You could also get better interest rates and terms, too. Simply put, be sure that you look into all of your options before you assume that you have none available to you.
Additionally, remember that your credit score is only one piece of the puzzle. An auto loan will also be based on things like:
- • Employment history