Have a credit score of around 700? Good work! A score that high will easily qualify for a car loan at a reasonable, as long as other factors like income and debt-to-income ratio are in line, and if you pay off your loan as agreed, you’ll have a good opportunity to boost your score from “good” to “excellent.”
Credit Score Ranges
Let’s look at where a 700 credit score falls on the scoring spectrum. There are six basic credit score ranges:
- Excellent…720 or higher
- Good…between 680-719
- Average…between 620-679
- Poor…between 580-619
- Bad…between 500-579
- Horrible…anything under 500
The largest lenders only look at the top two credit tiers. Since a 700 falls in the good credit range, you will find it easy to be approved for a car loan through any financial institution you choose, based on your credit score alone. You may still have trouble qualifying if you have issues with other car loan criteria, however.
Other Loan Criteria
- Loan to value (LTV)…between 85 and 115 percent. The better your credit score is, the higher the LTV can be.
- Down payment…at least 10 percent or $1,000, but with a score of 700, you may qualify for some zero down offers.
- Time on job and time at residence…one year minimum, two years preferred.
- Monthly income before taxes…depends on lender, usually $1,400 minimum.
- Total debt to income (DTI) including new payment…most lenders look for less than 36 percent, but a high credit score may be approved with a higher DTI.
- Prior use of car loans…preferably one loan with at least 18 on-time payments of $150.
Your credit score is actually a small percentage of what is considered when you apply for a car loan. Any one of these other criteria can derail an otherwise solid application.
Ensuring You Get the Best Rate Possible
APR, as you probably know, has a massive impact on how much your car loan will cost you. Your strong credit score may make approval a breeze, but you still have to compare APR quotes from a variety of dealers and lenders to make sure you get the most competitive rate. Otherwise, your good credit score could go to waste. Fortunately, the credit-scoring models now allow you to apply for multiple car loans within a short period of time–typically 30-45 days–without damaging your credit, because the various applications are condensed into one single hard credit inquiry. That means you can feel free to submit multiple applications, ultimately going with the dealer or lender who offers you the best rate and terms.
Apply through us, and we’ll put you in touch with a finance specialist who can help you compare rates and incentives. You’ve got a strong credit record–now make sure you get the rate you deserve!