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Worried about buying a car with a 677 credit score? Relax, you’re in the sweet spot of good credit! While not quite “excellent,” a 677 score opens doors to favorable auto loan terms and competitive interest rates.
Let’s dive into the world of car financing with a 677 credit score:
The Good News:
- You qualify for most auto loans: Lenders generally consider scores above 660 as “good,” making you eligible for a wide range of loan options.
- Competitive interest rates: Your 677 score puts you in line for lower interest rates compared to borrowers with lower scores. This translates to significant savings over the loan term.
- No need for a cosigner: With good credit, you can likely secure a loan without needing a cosigner, giving you greater control over your finances.
The Not-So-Good News:
- You might not get the best rates: While your score is good, it’s not exceptional. This means you might not qualify for the lowest interest rates reserved for borrowers with scores above 720.
- Higher down payment required: Compared to borrowers with excellent credit, you might need a larger down payment to secure the loan.
But don’t fret! Even with a 677 score, you can still get a great deal on your car loan. Here’s how:
Shop around for the best rates: Compare offers from multiple lenders to find the lowest interest rate and most favorable terms Don’t settle for the first offer you receive.Consider a shorter loan term: Opting for a shorter loan term, like 36 months instead of 60, can reduce the total interest paid even with a slightly higher monthly payment.Make a larger down payment: Putting down a larger sum upfront can lower your loan amount and potentially qualify you for a better interest rate.
Remember, your credit score is just one factor lenders consider. They also look at your income, employment history, and debt-to-income ratio. By demonstrating financial stability, you can boost your chances of securing a favorable loan even with a 677 score.
Here are some additional resources to help you navigate the car-buying process with a 677 credit score:
- Upstart’s guide to 677 credit scores: https://www.upstart.com/credit-score/677-credit-score
- Bankrate’s guide to auto loans with good credit: https://www.bankrate.com/loans/auto-loans/what-credit-score-do-you-need-to-buy-a-car/
With careful planning and research, you can absolutely buy a car with a 677 credit score and drive away happy.
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What is the minimum credit score for a car loan?
While there isn’t a set minimum credit score that all lenders require to apply, you should anticipate minimum requirements. These requirements vary depending on the lender and are in place to make sure that borrowers are lending to people who can repay their debts with confidence.
Not all lenders use the same credit score reporting agencies as their source of truth. There are two main scoring systems you will encounter when financing: FICO score and VantageScore. Most lenders use FICO, which ranges from 300 to 850. VantageScore is less common but still ranges from 300 to 850. Your credit history, amount owed, balances, and available credit are all factored into both scores; the weighting is different.
Some auto lenders also use a version of the FICO score called FICO Auto Score. This kind of scoring, which goes from 250 to 900, focuses only on your capacity to repay debts. Lightbulb Bankrate tip.
It is possible for lenders to use a different type of credit scoring metric. If you are unsure, reach out to your prospective lender to determine what measure will be used.
However, depending on the lender and the vehicle you want to finance, different minimum credit scores are required to qualify. For instance, the minimum requirement for myAutoLoan is 575, which puts it in the very poor category according to FICO. Gravity, a refinance lender that caters to similar borrowers, sets a minimum of 600.
All of this means that you can find an auto loan that meets your needs even if your credit isn’t the best. You just might need to do a bit more homework to get the best rate. And luckily, your credit score isn’t the sole measure used to determine your interest rate. Lenders will take into account various factors such as your income, employment history, and debt-to-income ratio, even though your credit score accounts for a significant share of the total.
What Credit Score Do Car Dealers Use?
FAQ
Is 677 credit score considered good?
What is the lowest credit score to buy a car?
Can I buy a car with 670 credit score?
Can I get a car loan with 678 credit score?
Can you get a student loan with a 677 credit score?
Student loans are some of the easiest loans to get with a 677 credit score, seeing as more than 60% of them are given to applicants with a credit score below 700. A new degree may also make it easier to repay the loan if it leads to more income.
Is a 677 FICO ® score good?
A 677 FICO ® Score is Good, but by earning a score in the Very Good range, you could qualify for lower interest rates and better borrowing terms. A great way to get started is to check your credit score to find out the specific factors that impact your score the most and get your free credit report from Experian.
Do you need a good credit score to buy a car?
That’s why most people who end up taking out an auto loan have a good or excellent credit score. The lower your credit score, the lower your chances of you being able to buy a car. If your credit score needs a lot of work, it may be hard to find a lender who will approve you for a car loan.
What credit score do you need for a car loan?
Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.