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Posted in Auto Loans
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Question By
ChrisTK

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Approximate Credit Score Needed For Car Loan under $10,000?
So I'm trying to figure out what direction I should be taking when I go car shopping and, depending on which is better, depends on what I'll be doing now.

My last old car experience was just horrific in general and the reason why I am refusing to even consider cars made before 2007. So with this in mind, I realize if I go ahead and buy a car I'll be dropping between $3500-$5000. If I finance, this is where the loan is needed as I'll then be paying between $6000-$10500.

So either way, I want to know what type of credit score I should be trying to achieve to get a loan of, ideally, $7000. It's currently a 610 and I most likely won't be car shopping until September anyway. And, as I realize this matters, I'm 20 and can't get a cosigner.

If I need to wait a while, like it needs to be in the 650 range (which will be a while), then I'll just go ahead and save up the thousands to buy. But if I'm close enough to try, then I plan on saving up $1,500-$2,000 for a down-payment. IF this matters at all, I currently go through a credit union.

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I got a car loan at a credit score of 619 and the car was worth a little more than $8,000. And I also didn't have as high of a downpayment. I think with your score and the downpayment you should probably be able to get a financier at your current rate now. Good luck!

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Some things to think about with auto loans:

Most auto lenders use an auto version of FICO scores or some other version of FICO scores. (not the scores you get here). Check them somewhere to see where you stand. Your overall credit profile is just as important as your scores. Are your reports healthy and robust? Your employment history (time at current job), your income and your "debt to income ratio" will be important as well. The year and mileage of the auto to be financed is important, many auto lenders won't finance older vehicles or vehicles with high mileage. The vehicle's book value will also come into play. There are dealerships that advertise to work with a multitude of lenders that will finance any credit situation, be wary of the rates though. Don't get yourself into a deal where the loan will go "underwater". Many people come to this forum asking what they can do about underwater auto loans and there is no good news for them.

Reply by
ChrisTK

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I guess that all makes sense, so I'll keep it all in mind. I don't know what an underwater loan is, though, so can you clarify that?

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An "underwater loan" is when you owe more on the loan than what the car is worth.

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