In the world of auto finance there are many credit scores. Most of us know about FICO and its range from 300 to 850. 850 is nirvana and 300, well let’s not go there. With nearly 50% of Americans with scores under 675 since the economic downturn that began in 2007 the credit rating for car financing has been a moving target. Once a 540 would get you a car loan, albeit at a very high rate of interest, and then 540 would get you rejected by all but the buy here/pay here pirates. Good news is that a 540 will again get you a loan, you’ll have to pay a high interest rate but it is available from sources other than those we mentioned earlier.
Your credit score for auto finance purposes pretty much dictates the terms you’ll be offered and the size of loan you’ll be able to get. So when you’re preparing to buy your next car the best place to start is your credit report and the credit score which is derived from it. Check the report over carefully, any errors should be corrected as soon as possible. It’s preferable that you complete the corrections if any before you start to shop because the difference of a few points on your credit score can possibly save you hundreds of dollars in interest charges as well as a lower car payment every month.
How is your credit score derived? Here’s a quick breakdown:

35% is your payment history (on time, late and how late factor in here)
30% is credit utilization how much of your credit limit is being used
15% is the length of your credit history
10% is the type of credit used (credit card, installment loan, mortgage)
10% recent hard credit inquiries ( generated when an individual is seeking a loan or applying for a credit card)

If you are in the market for purchasing your next car consider the as a source for your next auto financing. We have a national network of dealer/lenders, a quick and simple application, a secure website and professionals who can get financing for almost any credit score!