What credit score is needed to buy a car? As a newbie, you would probably feel intimidated by the process. It all starts with proper research before a purchase.
Planning to buy or lease a car, but worrying about your credit score? Perhaps you need to do thorough research first. For some people, especially the first-timers, buying or leasing a car can feel intimidating. The first thing to do is whether they can answer this question:
What credit score is needed to buy a car?
Note down that lenders use the number to decide whether you are qualified for a car purchase or a car loan. The most critical part is the interest you will pay later on. Another thing to note down is the difference between the credit score you need with the kind that will give you the best deal.
When it comes to buying a car, you will probably need around 700 or higher for a credit score. Do not be fooled by the number, because it is much more favorable to you than the opposite. If your credit score is lower, then chances are the interest rate is higher.
In other words, it will take a longer time for you to pay off the interest rate than having a higher credit score. More importantly, that number will help you to get a new car instead of an old one.
To buy a secondhand car, your credit score should be at least about 650. Although at least you get the car, make sure that it is still in good condition, too. The last thing you ever need is to spend more money than your original plan, just because the car breaks down easily.
What credit score is needed to lease a car?
Now, here comes another equally important part. You do not just wonder about what credit score is needed to buy a car. As an alternative, you also need to know about a credit score for leasing a car.
So, what credit score is needed to lease a car? The credit score rate is almost similar to the one for purchasing a car. The number goes between 500 to 700. Of course, the variety depends on which measures you choose to take.
If your credit score is about 500 or below, then be prepared to pay about 10% higher of interest. If your credit score is higher than 700, then you are in luck. The interest rate is also lower.
Of course, knowing what credit score is needed to buy a car or loan one is not good enough. You also have to make sure that your credit score is really good, so it will be easy to apply for a loan or a purchase by credit. Consult with your financial consultant.