How Your Credit Score Affects Approval For Car Loans
While shopping around for loans to purchase a car, it is important to note that car loan credit score
plays a major role in determining approval for an auto loan. Each time you apply for credit, an inquiry
will be made with the credit agency. Borrowers are rated within a range of 300 – 850 in which 300
represents the highest risk while 850 is the lowest.
Some factors that are likely to affect credit score include paying your bills on time, current loan
obligations, and negative reports filed to name a few. As you look around for a good deal on an auto
loan, keep in mind that inquiries you make within 30 days are considered one inquiry while inquiries
that are made by credit providers on the other hand appear in a borrower's statement. Nevertheless,
shopping for an auto loan does not affect your eligibility.
Interest is yet another determining factor. Generally, individuals rated 700 and higher stand a better
chance of getting a lower interest loan. Borrowers with scores of 650 or lower are considered higher
risk thus making it harder for borrowers to access car loans. People with these scores should consider
subprime auto loans to help repair their credit.
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