Navy Federal’s Credit Score Requirements For Auto Loans
There is a lot of influence that your credit score has on the interest rate and total cost of your auto loan. You can help lower the rate on your next car by learning how you can help.
- Generally, the higher your credit score, the lower your auto loan rate.
- Your credit score is determined by factors such as your payment history, how much you owe already, and other factors.
- The range of credit scores ranges from 300s (very poor) to 800s (exceptional).
The purchase of a new car is more than just getting to where we need to go for many of us. It’s also about relaxing on the open road, listening to our favorite tunes, and going to see the people we love.
Maybe you have already started to look at advertising and reviews, figure out what you can afford, or even go to a dealership if you are considering financing a car.
Are there any other things you should know about the product besides the features and the sticker price?
What Is the Impact of Your Credit Score on Your Auto Loan Application?
Keep in mind that if you plan to finance your new vehicle, the cost will include more than just the price that you settle on with the seller when you negotiate the price with him.
Your total car payment will consist of your interest rate, your fees, plus the cost of the vehicle, which will make up your total car payment.
In addition, it is important to keep in mind that not every borrower qualifies for the same interest rate. You will be offered a loan based on a variety of factors that will determine the terms of the loan.
One of the most important factors
Your credit score will have a significant effect on an auto loan’s interest rate, and therefore your monthly payment, regardless if you are shopping for a new or used car.
Despite the fact that not all credit scores are calculated in exactly the same way, there are some common principles that all credit scores follow.
In addition to your payment history, how much you owe, the type of credit and debt you have, and how long you have had them are some of the factors that make up your credit score.
FICO®1 Score and VantageScore®2 are two of the most commonly used credit scoring models used by credit reporting services and lenders.
The tables below show how they rate credit scores according to each of these types.
Rating FICO Range
- Very Poor 300-579
- Fair 580-669
- Good 670-739
- Very Good 740-799
- Exceptional 800-850
Vantage Score Ratings
Rating Vantage Score Range
- Very Poor:- 300-499
- Poor:- 500-600
- Fair:- 601-660
- Good:- 661-780
- Exceptional:- 781-850
Can you tell me what that means to you?
Therefore, regardless of the fact that different lenders use different methods to determine credit scores, people with exceptional or at least good credit scores are likely to qualify for lower interest rates, while people with poor credit scores are likely to qualify for higher interest rates.
High Credit Score → Low-Interest Rate
Average Credit Score → Medium Interest Rate
Low Credit Score → High-Interest Rate
Factors other than these
The size of your loan and down payment. You are more likely to get a lower rate if you borrow less or make a large down payment.
The length of the loan. The interest rates on short-term loans tend to be lower than those on longer-term loans.
The age of the car. As a general rule, the newer the car, the lower the interest rate will be. There are other terms that auto lenders use as well, such as:
Those with excellent credit are considered “super-prime“
Those with very bad credit are called “deep subprime” or “subprime borrowers“
There Is A Bonus Tip For People With Low Credit, Who May Not Be Able To Qualify On Their Own For A Used Or New Car Loan, But May Be Able To Get One With The Help Of A Corian.
Navy Federal’s Credit Score Requirements For Auto Loans
What is the magic number?
It is likely that by now you are wondering if there is a minimum credit score you need in order to buy a car.
While there is not a magic number that lenders use to determine how much interest they should charge you, they do use credit scores as a guideline to determine how much to charge you.
To ensure that your credit report is accurate, make sure to check your credit report a few months before applying for an auto loan.
When you’re not sure where you stand, you can order a free copy of your credit report 3-6 months before you apply for an auto loan if you are unsure of where you stand.
By doing this, you will have enough time to improve your credit if you need to do so in the future.
As a matter of fact, it’s a great idea even if you will not be borrowing for the purchase of your car since your credit score can also have a significant impact on your car insurance rates.
Credit Improvement Tips
Make sure there are no errors in your report. As soon as you receive your credit report, it is important that you check it carefully for any errors that could be affecting your credit rating. Please contact the reporting service in order to have the information corrected.
Always pay your bills on time. In order to improve your creditworthiness, it is important to show your lenders that you are able to make payments on time and that you are capable of repaying your debts.
Making consistent payments from now on (and catching up if you can if you missed some payments in the past) will help you to recover your credit over the course of time, even if you have already missed some loan payments.
Repay your smaller loans. Could you please tell me if you have any accounts with small balances in them? If you have multiple accounts, it is best that you pay them off as soon as possible because credit bureaus may dock your credit score if you have too many accounts with outstanding balances on them.
When applying for new credit, store credit cards, or loans, be strategic. It is possible that your credit score could be affected if the average age of your accounts is too young, or if you are carrying high balances on your accounts.
In the meantime, if you do not have much credit history, it may be a good idea to apply for a credit card now so that you can begin building a history of always making your payments on time.
With Navy Federal Credit Union’s nRewards® Secured card, you’ll earn rewards while building your credit at the same time.
You need to be patient. For your credit score to improve, it will take more than a month or two.
The process of rebuilding your credit score may take longer if your credit score is low because of many missed payments or other issues related to your personal finances.
You may still be able to get an auto loan from Navy Federal even if this is the case for you. It is important to us that we consider your relationship with our credit union as a whole, in addition to your credit score-you are not just another number to us.