Varying Credit Car Loans
When buying a new or used car, you could pay for it in cash. However, it’s more likely that you’ll take out an auto loan and make payments each month until the vehicle is completely paid off.
When it comes to car loans, you may wonder what type of credit you need to get one. The fact of the matter is, you can get a loan whether you have good credit, less than perfect credit, or no credit at all.
Below, we’ll specifically talk about car loans for those with less than perfect credit. Our finance team at Boardwalk Honda will cover all the ways you can get a loan with less than perfect credit and even several ways you can improve your credit score. Then, you can always contact us to start shopping for a new ride near Atlantic City, Egg Harbor, and Galloway, NJ.
Getting a Vehicle With Less Than Perfect Credit
Finding the right auto loan can be crucial to getting behind the wheel of your favorite Honda model. However, certain dealers handle less than ideal credit scores differently than others. That being said, it’s certainly possible, and in some cases quite simple, to get a car loan with less than perfect credit, especially if you follow these tips…
Understand Your Credit Score
A credit score is a 3-digit number that’s generated from reports by several credit bureaus: Equifax®, Experian®, and TransUnion®. You should know this number before you apply for a loan, as it can tell you what type of loan you’d get with what interest rate.
The number can range anywhere from 300 to 850 and is calculated from the following factors:
- Types of Credit Accounts: This deals with whether you can manage both installment accounts (car loans, personal loans, mortgage) as well as revolving accounts (credit cards & other types of credit lines)
- Payment History: Making payments on time
- Length of Credit History: The average age of all your accounts
- Credit Usage: Which of your accounts have balances, how much you owe, and the portion of your credit limit in use on revolving accounts
- Recent Activity: Whether you have recently applied or recently opened new credit accounts
While credit scores vary, they’re based on the data that’s in your report. By reading through this information, you can see what exactly is affecting your score and where you can improve.
Save for a Down Payment
When purchasing a new or used car, it’s recommended to put down 20% or 10% of the total cost initially. In doing so, you can ultimately save yourself a little down the road.
If you can save a good bit of money in the time leading up to buying a car, then you can make a more significant down payment. By doing that, you can reduce the amount of a car loan that you’d need.
Get Pre-Approved for a Loan
It’s also recommended getting pre-approved for a loan at whatever local dealership you’re dealing with. Most dealers have finance applications online that take just a few minutes to complete and that you can fill out right from home.
By filling out this short and secure form, you can get all your pertinent information sent to the dealer’s finance center right away. Soon enough, a representative of the dealership will get in touch with you to discuss your financing options and the type of loan you can afford.
With the help of these pre-approval applications, not only can you expedite the entire car-buying process, but you can also gain some transparency from the dealer in your financing journey.
Ways to Improve Your Credit
While the above tips, when implemented, can help you get a car loan, there are several ways you can improve your credit score and, as a result, improve your chances of securing an auto loan that fits the needs of your budget. So, let’s take a closer look at how you can give your credit score a boost.
One way to improve your credit score is by making sure you pay all your bills on time, such as your phone payment or student loans. You’ll also want to make sure to keep the balances on your credit card or cards as low as possible.
Another way you could improve your credit is by only applying for and opening new credit accounts when needed. The simple act of applying for credit can have a negative impact on your overall score. In fact, this hard inquiry can stay on your report for two years.
By being mindful of the type of credit you have and paying everything off on time, you can see a significant increase on your credit score overall. This can then determine what type of car loan you’d get and at what interest rate.
Friendly Car Financing near Me
Whether you love where your credit score is, or are interested in making some improvements to it, our team is ready to help you get behind the wheel of your favorite Honda vehicle.
We have a team of finance experts who can match you with an auto loan that perfectly fits the bill. If you’re visiting our dealership, one quick meeting with our team can get the ball rolling. Then, they’ll come back with a range of options that can get the keys in your hand.
Along the way, you can also make use of some of our online financing tools. Our suite of resources includes our own finance application if you’re looking to get pre-approved ahead of time. We also offer tools such as:
There’s plenty more to explore in our finance center that can make your buying journey a smooth and simple one. If you’re ready to get started, either fill out our application or give our team a call!
Shop for a New or Used Car Today
If you’re looking to get a car loan with your current credit, no matter what it may be, the experts at Boardwalk Honda are here to help. Contact our finance center, and we’ll have you driving around Atlantic City, Egg Harbor, and Galloway, New Jersey, in a great new vehicle in no time!