Using an auto loan to get that new car you have been interested in for some time can be greatly affected by one three-digit number – your credit scores. Those who are considering buying a car may want to find out their current credit scores, so they can determine whether it will be easy or difficult to obtain a car loan for their purchase.
This number also affects how high your interest rate will be. Here are some facts about credit scores to help make that car purchase a reality.
FICO credit scores
This is the most commonly used model for determining credit scores, and it ranges from 300 to 850, ranging from very poor to excellent. The higher your credit score, the easier it is to get a loan for a reasonable interest rate. The scale for this ranking includes 760 and above as excellent, 700 to 759 as great, 660 to 699 as good, 620 to 659 as average, 580 to 619 as poor, and 579 and below as very poor.
These scores indicate what your delinquency rate is – the higher the credit score, the smaller your delinquency percentage, which can greatly impact the loan terms as well as how much you will qualify for.
Vantage Score Range
This is the second most popular way in which people can get their credit score. It was developed by three major credit bureaus and is straightforward in terms of letting a person know where they stand.
The ranges include 900 to 990 equally an A, 800 to 899 is a B, 700 to 799 is a C, 600 to 699 is a D and 501 to 599 is considered an F. Much like a school report card, and A is far better than an F.
Ways to boost your credit score
If you have a poor credit score, there are still ways to get the car of your dreams. The first step is to request a copy of your credit report. From here, you can see if there are any discrepancies while also examining where you may have been going wrong.
This will give you a starting point to begin making adjustments that can improve your score. In addition, you can set up payment reminders to help you pay your bills on time, while also reducing the amount of debt you owe.