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Can I Get a Car Loan with a 600 Credit Score?

Yes, it is possible to get a car loan with a credit score of 600, and we can help. You simply need to meet a few guidelines that lenders will consider. For the most part, lenders are going to look at a total of nine factors when considering whether to approve you for car loan. In addition to credit score, the other eight factors include:

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  • Loan to value ratio (LTV).
  • Loan term.
  • Vehicle age.
  • Vehicle mileage.
  • Down payment.
  • Work history.
  • Before tax (gross) income per month.
  • Debt to income (DTI) ratio.

When you submit your application through us, you can find out if you qualify. In most cases, provided you make at least $1500 per month before taxes, we can get you approved.

Minimum Requirements You Need to Meet

In general, lenders want to see an LTV (Loan-to-Value Ratio) under 115 percent. This is the percentage of the vehicle’s cost that you want to finance.  With a 600 score, you may need a lower LTV. They also tend to restrict loans to vehicles with fewer than 100,000 miles that are less than eight years old. With a credit score of 600, lenders will most likely ask for a down payment that is 20 percent of the purchase price. The vast majority of lenders want to see that you have a gross income of at least $1,450. The amount of DTI (Debt-to-Income Ratio) that you can have depends on your credit score. With a score of 600, you will probably need a DTI that is under 35 percent of your gross income. Lenders want to see that you have been at your current job for at least two years or working within the same industry for that period of time.

The FICO Auto-Enhanced Credit Score

When a lender does look at your credit score, they will see one that is not available to you. FICO calls it an auto-enhanced score, and it is heavily weighted by your previous use of car loans. If you have a history of on-time payments and have made at least twelve payments toward a car loan, this score is considerably higher than your normal credit score. On the other hand, if you have a history of late payments or a repossession, this score will be much lower. Unfortunately, as you a consumer you do not have access to this score.  It can only be purchased by lenders.

Interest Rates to Expect

With a credit score of 600, you will have to pay a higher interest rate when you are offered a car loan. That interest rate will be at least 10 percent, but more commonly will come in around 18 percent APR. If that sounds like a lot, it is. Such high rates make negative equity (the predicament of owing more on a car than it is worth) a real risk. For this reason, it is important to offer a down payment of at least 20 percent, choose an inexpensive vehicle with a strong record of reliability, and plan to drive this vehicle until it is paid off.  If you get a car loan with a credit score of 600, you should know that trading it in early will likely result in a large deficiency balance–money owed on an asset you no longer have. The only way to find out what interest rate you will be charged is to request an APR quote.

Rebuilding Your Credit

Here is the good news:  taking out, then paying off a car loan will almost certainly result in a significantly elevated credit score. It is difficult to determine just how much your score will rise, numerically speaking, but some experts say that you can expect an increase of 5% per month.  The most important thing, of course, is that you make each and every payment on time. In order to ensure timely payments, setting up an auto-draft or auto-payment is recommended.  Most lenders support this type of automation these days.

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