Credit Score Needed For A Great Car Loan In Hamilton

Credit Score Needed For A Great Car Loan In Hamilton

Posted on April 27, 2021

Credit scores have a huge influence over the interest rate you’ll pay on an auto loan in Hamilton. Along with the amount you borrow and the amount of down payment, your credit score helps decide whether you get the auto loan and what rate you’ll pay on it. But what is the credit score needed for a great car loan? Our Hamilton auto loan team explains.

Credit scores and auto loans in Hamilton

Your credit score will be a number between 300 and 900. Each credit bureau uses a different scoring method so you may find your score differs with each one.

• People with poor credit or no credit will usually score between 300 and 559
• People with fair credit will have a score of between 560 and 659
• People with good credit will have a score of between 660 and 724
• People with very good credit will have a score of between 725 and 759
• People with excellent credit will have a score of between 760 and 900

You can check your credit score for free once per year, per credit bureau. Contact TransUnion or Equifax to access your credit report, which will include your score.

The higher your credit score, the better with debt you are assumed to be. You are also deemed a lower lending risk so will enjoy lower interest rates.

That does not mean people with poor or fair credit cannot get an auto loan though. They can if they use specialist lenders or work with one of our Hamilton auto loan experts.

People with less than good credit will pay higher interest than those with good or above for the same reasons people with higher scores pay less. You’re seen as a higher risk borrower because of the score.

It’s not personal, it’s just how the system works.

Is there an ideal credit score needed for a great car loan?

There isn’t an ‘ideal’ credit score. The higher the better is usually the way with these things.

You can access auto loans wherever you are on the spectrum and that’s a good thing. The only things that differ will be the lenders who will work with you and the interest rate you‘ll be charged.

Aside from modest details, that’s the only difference between a bad credit car loan and a standard loan.

Hamilton auto loans can help build credit scores

While we would never encourage anyone to get an auto loan purely to rebuild their credit score, if you have one, you will help increase that score.

Your credit score is made up of your payment history and credit mix, along with other things. Payment history can make up to 35% of your credit score on its own. Pay on time every month and your payment history will reflect that.

Credit mix is the different types of credit you’re using. As long as you’re not overstretching yourself, having a variety of affordable debt actually works for you.

Borrow too much though and it will work against you!

When you’re ready for a car loan, get in touch with the Hamilton auto loan experts at Northway Ford for great deals on auto finance.

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