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Posted in Auto Loans
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Question By
chernisky1

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Looking to get a loan for a car that is 16k and wondering if a 586 credit score is good enough

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Down Payment is the key here.

Helpful to 2 out of 2 people

It's quite possible.  However, if you're one of these people who are coming in with $0 down and looking for a $200/mo payment, you'd be better off with a skateboard.

The best way to get your credit AND low interest is with a Co-Buyer having a FICO of 700 or better and some cash to put down.  This is the absolute easiest way to get on the road in the shortest amount of time.  However, this is not always practical.

If you can't come up with a good Co-buyer, there are 3 things you'll need to get approved.

1.)  Cash down.      2.)  Cash down.    3.)  Cash down

The more of #1, #2 and #3 you can come up with, the better the chances of getting a good loan at decent interest rates.  

Don't shop your credit around from one dealer to another.  The hard inquiries won't help your chances.  Let you're dealer know upfront you have credit issues and see what they suggest before falling in love with a car.  Many dealers do have special finance programs for people with credit issues, but you're back to getting as much of #1, #2 and #3 again.    The very least you'll be asked for is tax, title, fees, and a small amount down toward the car.  On the car you're considering, that would be at least $1,500 to $3,000.  However!  If the banks feel the monthly payment is beyond your means, they won't finance that car without even more down.  You'll be given a smaller credit limit, and will have to buy something other than what you want.  Again, most of this is based on the amount of cash you have to put down.  The more you have, the more you can buy.

Don't hold your expectations real high.  In your position, you have to take baby steps.  In other words, you're probably going to end up in a car that you need and can afford vs. a car you really want.  As time goes on and your credit score improves, you'll be able to move upward.

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Reply by
Addison170

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Let me add one correction to roy2ohio's response.  DO SHOP AROUND!!  Whenever you shop for big ticket items such as cars or mortgages, do all your credit inquiries within the same 30 day period and it only counts against your credit score as 1 inquiry, regardless of how many you actually had.  All the inquiries will still show up on your report, but only 1 is counted against your credit score, which is very low impage (4-5 points).  FICO realizes that consumers should have the right to the best deals and shouldn't be penalized for being smart shoppers.  Best of luck!

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Helpful to 0 out of 1 people

Not if you want a decent interest rate.

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