The first step to qualifying for a good car loan with lower interest is to check your credit score and find where you stand with your credit rating. You can do this online for free. TransUnion, Equifax and Experian offer credit reports that make up your credit rating. Our resource page offers a link where you can get free credit score evaluations. You also have the ability to get monthly updates if you choose to sign up.
Knowing your present credit score will allow you to use tools like online auto loan payment calculators to estimate car loan payments, It will also help you know what type of auto loan lender you should apply with to be approved for your vehicle loan.
If you use dealer financing, it can also help you to know if the finance agent is offering you a fair interest rate or if he is taking advantage you with an overpriced auto loan.
This credit rating chart can help you understand how you fit into the loan category rating system.
- Decent | 625 – 600
- Average | 600 – 575
- Below Average | 575 – 550
- Semi-Poor | 550 – 525
- Poor | 525 – 500
- Bad | 500 – 450
- Awful | 450 – 425
- Terrible | 425 – 400
You should understand that there are ways to rebuild your credit, but they take time and planning.
If you think you have mistakes on your credit report, by all means, contact the credit agency and have them corrected as soon as possible, before you apply for your car loan.
If you need a car now and are satisfied that your credit report is accurate than you will have to work with the score you have for now.
You will need to review your personal budget and plan what you can afford for monthly payments. Again an online auto loan calculator is a helpful tool in estimating what you can afford with the down payment you are planning to use.