![]() ![]() You can look up average car loan interest rates to get a general idea of rates for people with your credit score.įor most lenders, your credit history matters as much as your current credit scores. Making payments on time and paying down credit card balances can help bolster your credit so you can qualify for a better loan. If your credit is subprime or poor - typically a score of 600 or lower - and you don’t absolutely require a car right away, consider spending six months to a year improving your credit before you apply. Most auto loan lenders use specialized scores that emphasize your history of repaying auto loans. They are useful ways to gauge your progress, but they may not be the scores that lenders use to approve you. (Due to COVID, you can now request a copy of your credit report weekly through December 2022.) If you find errors or evidence of fraud when you check your credit report, you should file a dispute to correct them, before you apply for a car loan.Ĭredit reports are the raw material used to calculate credit scores. Many banks, credit card issuers and personal finance services - including NerdWallet - also provide free online credit scores and report information. You’re entitled to a free copy of your report every 12 months from each of the major reporting bureaus (Equifax, Experian and TransUnion) at. See your free score anytime, get notified when it changes, and build it with personalized insights. If there are any errors or incorrect information on your report, such as fraudulent activity, you could be turned down for a loan or offered only a very high interest rate. Your credit score and your income will determine how much you qualify to borrow - and at what interest rate.ĭon’t apply for an auto loan without checking your credit report first. To get a car loan with the best interest rate, it’s essential to follow certain steps, such as shopping lenders and getting preapproved, before going to the dealership.
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