If you’re planning on buying a car in the near future, you’ll want to make sure you have a good credit score. But what is a good credit score to buy a car? How can you make sure you get the best interest rate on an auto loan? Here is some basic information you should know about credit scores and buying a car:
Good Credit Score for Buying a Car
Generally, if you have a good credit score, it will be a good enough credit score to buy a car. If your credit score is 750 or higher, the interest rates you can expect on an auto loan will be as low as 3-4 percent. On the other end of the spectrum, if your credit score is 600 or lower, your interest rates will likely be very high. They could be anywhere from 12 percent to nearly 20 percent!
You should also consider that for a new car, you may need a higher credit score than if you are buying a used car. Also, keep in mind that the interest rates for used cars are typically higher than loans for new cars.
Other Tips for Buying a Car
Before you buy a car, you should take a few months to work on improving your credit score if it is not very high. There are several factors that impact your credit score, but some of the most important ones are payment history and credit utilization. Be sure to pay your bills on time, and keep your credit utilization to 30% or less.
Additionally, save up as much as you can for the down payment. The larger the down payment, the lower your monthly car payment will be. Finally, get quotes from multiple lenders so you can find the best deal on your auto loan.
If you struggle to pay off debt, ACCC can help. Call 800-769-3571 today to speak to a certified credit counselor.