Auto Loans

If you don’t know what the minimum credit score for an auto loan is then you are setting yourself up for rejection after rejection. I don’t want you to get rejected so I’ve put together this short article to give you some inside information on credit scoring and tips to follow to improve your approval rate with lenders.

What’s with credit scoring anyway?
The ‘credit score’ was created as a standard for assessing the ability of a borrower to repay the amount borrowed in the form of a loan. It’s a standardized system of rating and is calculated using several variables. It its simplest for your credit score will always be assessed based on the following guidelines:

• 720 and above is Prime Credit
• 680 to 719 is Good Credit
• 640 to 679 is Marginal Credit
• 600 to 639 is Sub-Prime Credit
• 580 to 599 is Poor Credit
• 525 to 579 is Bad Credit
• 480 to 524 is Very Bad Credit

If you find yourself in any category below marginal credit then it’s not the end of the world. The finance industry has recognized that in these tough economic times there are a lot of people who can’t boast a good or above credit rating. As a result of this there a lots of companies that will lend money to people who for whatever reason have a poor credit standing.

What’s really good about auto loans is that qualifying is not as tough as say qualifying for a mortgage. The sum of money involved is usually smaller in comparison and so all one has to do is meet the minimum credit score for an auto loan.

If you find yourself with a score of say 480 – 524 (Very bad credit), the best way to improve your chances of getting an auto loan approval is to come up with a down payment. This will not only reduce the amount you have to borrow, but will give the lenders some confidence that you are at least able to come up with some of the cash.

Finding that perfect car loan doesn’t have to be difficult and I hope that having read this article you now understand the fundamentals of credit scoring and what you can do today to ensure that you are successful with a loan application.

There are lots of online auto loan companies that specialize in lending to people with very low credit scores. I am confident that now you’ll be able to chose the right one and get that auto loan you’ve always wanted.

Finding post bankruptcy auto loans can be a bit difficult if you are just emerging from bankruptcy. But it gets worse. Choose the wrong lender and they could end up saddling you with an interest rate so high, you find yourself worse than you were before you even filed for bankruptcy. In this article, I’ll outline the best strategy for getting an auto loan after bankruptcy and how to go about finding the best rates.

Be Upfront from the Outset
if you’ve declared bankruptcy it won’t be a secret, at least not to financial institutions. With this in mind, it’s important that when you first approach a lender, you are prepared to explain fully what happened and how you ended up a bankrupt. Usually a brief letter will suffice and all you have to include in it is details of past loans etc and any circumstances that contributed to you falling behind in payments. You’ll find that once you get over this initial hump, finding post bankruptcy auto loans will be a breeze.

Where to look for a Loan
the best place to find bankruptcy auto loans is the internet. I say it’s the best because in recent times with the economy taking so big a nosedive, lots of people have filed for bankruptcy and companies have shifted business online to attract these new bankrupts.

These companies specialize in lending to people who have filed for bankruptcy, so your chances of being approved for a loan are very high. This is not to say it’s automatic and there aren’t pitfalls to avoid, but all in all, if you start online your chances of success are greater.

The only caveat I’ll issue is that when you search online, pay attention to the interest rate that these lenders extend to you. As a bankrupt, you’ll be vulnerable to high interest rates, since you are a higher credit risk. You won’t be able to borrow at the standard rate afforded to people with a better credit rating but it doesn’t mean you should let people take advantage of you. With that in mind, it’s best to go for a car that is within your budget. Sure, you may not be able to your dream car, but you’ll have a much better chance of getting approved for a less expensive car.