How to Find a Car Loan with Less than 600 Credit Score
How to Find a Car Loan with Less than 600 Credit Score
Posted on January 19, 2022
If your credit score is under 600, it can be difficult securing a car loan in on your own. Our Copetown auto loan experts are going to show you how loans work and what you need to do if you want to find a car loan with less than 600 credit score.
How often do you check your credit score and are you using both credit agencies (TransUnion and Equifax) or just one? You should always look at reports from both agencies, so you have the correct information.
Each credit reporting agency will have their own unique scoring model, so the score reported by Equifax will be different than what TransUnion reports.
Since there is a risk of discrepancies, you need to stay on top of things.
Understanding why your credit score is under 600
We’ll explain how to secure a Copetown car loan with less than 600 credit score in a few minutes, but we need to understand why your credit score is low.
There are two primary influencers that impact your credit score, the first is your payment history.
If you pay your bills on time, your credit score will climb. Should you miss even one payment, your credit score may drop 20-40 points! This is why you must always pay your bills on time.
The second item that impacts your credit score is your total debt.
If you are carrying too much debt, it will lower your credit score. Try to keep your total credit utilization to around 20%-30% and you should be fine.
Finding Copetown car loan providers that will work with you
We touched on items that impact your credit score, now we can talk about how car loans work and how to find lenders that will work with you.
A car loan starts with an application, prospective lenders are going to look at your credit score, income and based on that information determine whether you are a good risk.
Your credit score shows how responsible you are with your finances. The higher score indicates that you are more responsible.
When a prospective borrower has a low credit score, there are lenders who will offer a loan provided the borrower has a substantial income. Your income will need to be stable, so if you are working a conventional job, you will need to be working a minimum of 3-6 months.
You will not be able to find lenders online who will give you a car loan a credit score under 600. Reach out to your local car dealership, they will be able to help you secure a loan. What the dealership will do is take their time to better understand your circumstances, and the root cause of your low credit score.
The dealership will negotiate on your behalf, if you tried to get the loan by yourself it would be declined but the dealership has a strong working relationship with these lenders.
Getting a car loan with a credit score below 600 is tough, but you can get one thanks to the local car dealership. You need to reach out for help soon though, car prices are rising.
For any questions, concerns, or inquiries. Please don’t hesitate to contact us here!
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