If you’re considering financing a new or used car, you’re probably wondering, “What credit score is needed to finance a car?” It’s a fair question, considering your credit score plays a large role in whether or not you’ll get approved. Read on to learn more about credit scores and the impact they have on car financing.
What’s the Average Credit Score to Finance a Car?
During Q4 of 2018, the average credit score of borrowers who received financing for a new car was 718, as well as 659 for a used car. During Q3 of 2018, borrowers who received financing for a new car had an average credit score of 714, while those who received financing for a used car had an average of 655. Generally, the higher the credit score, the more opportunities are available for lower interest rates and fees. Credit scores are separated into the categories below:
- Superprime: 781 to 850
- Prime: 661 to 780
- Nonprime: 601 to 660
- Subprime: 501 to 600
- Deep Subprime: 300 to 500
How to Get Car Financing with Your Current Score
Car financing is available, even to those with not-so-perfect credit. If you have doubts about your credit score and credit history, there are a few steps that can be taken to improve your chances of getting approved for a loan in San Diego, such as:
- Highlight the Positives: Even if an applicant’s credit needs work, a lender might be lenient depending on the situation. If an applicant has an outstanding credit card balance but has always kept up with their car payments, they may gain some favor.
- Bring Proof of Employment & Address: If you can show proof of employment and proof of address, you’ll get some extra plus points, especially if you’ve held your job and lived at your address for at least six months.
- Have Collateral: Do you own a home or are you able to make a down payment of at least 25%? If so, there’s a good chance you’ll qualify for auto financing, as well as a decent interest rate.
Learn More About Your Financing Options at Mercedes-Benz of Escondido!
Mercedes-Benz of Escondido is here to answer your questions about car financing, such as, “What is a simple interest loan?” If you’re concerned about your credit score and the impact it’ll have on your auto financing opportunities, contact us to speak with one of our finance experts. We can also help you decide if you should finance through our dealership or with another lender. You’re also welcome to visit us near Escondido and San Marcos for one-on-one guidance when you’re ready to trade in your car for a new luxury ride.