How Does My Credit Score Affect My Car Loan? | OK Carz

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Good Credit Car Loans vs Bad Credit Car Loans

You may have found a vehicle that you are interested in buying and need to take out a loan to do so. However, your credit score may be less than appealing. Perhaps your credit score may be really high compared to the average person. How exactly does credit affect a car loan? Let’s explore the differences you may find in a good credit car loan versus a bad credit car loan.

How Credit Impacts How Much You Pay

Woman checking her credit score

Despite two borrowers requesting the same amount of money from a lender, chances are that they will not pay the same. If one borrower has better credit than the other, that borrower will likely get a lower interest rate. Not only that, but the person with the higher credit score likely won’t be required to pay as much upfront as a down payment. In addition, the borrower with a good credit score will have an easier time getting approved for a car loan than someone with bad credit. Why does this happen?

From the lender’s perspective, borrowers with higher credit scores are deemed to be less risky. These people have proven to pay their bills on time and the lender will have more security in making sure they get their money. Meanwhile, someone with poor credit may be seen as too risky. They feel there is a much lower chance that a person with poor credit will keep their financial commitments or make timely payments. Therefore, the interest rate is normally increased for poor credit individuals, and getting approved may take longer.

What to Do if You Have Bad Credit

If you have less than perfect credit, it’s okay. We understand that your credit score is not an accurate reflection of a person’s willingness to keep their commitments, and not always the best way to gauge an individual’s lending risk. The fact is that everyone deserves reliable transportation.

We own both car dealerships and the finance company. This gives us the power to offer loans based on your income and stability regardless of your credit score. Let us help you get into one of our high-quality pre-owned vehicles at one of our many Central Florida area dealerships today.

To get pre-approved, simply fill out and submit our online application. Need help along the way? Contact one of our No Credit Finance Specialists at 863-286-3822 and we will answer any questions that may arise.

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