How Your Credit Score Could Affect a Car Loan

Is there a connection between your credit score and your ability to get a car loan? What if you’re trying to buy a car even though your credit is less than perfect? Here’s what you need to know about credit scores and car loans.

What do I need to know about credit scores?

First, the basics about credit scores. Your credit score is a 3-digit number that will fall between 300 and 850, with 850 being a perfect score. This number is calculated based on your financial history, which is comprised of factors like your ratio of debt to available credit; the length of your managed credit history; the number of credit types you’ve managed; your recent credit inquiries; and your bill payment history. You can get your credit score for free by contacting one of the 3 major credit bureaus—Equifax, Experian, and TransUnion.

For a more detailed breakdown of credit scoring, see our articles about Understanding Credit Scoring and Tips for Improving Your Credit.

How are credit scores and car loans connected?

Your credit score helps lenders determine whether it may be a risk for them to lend to you. A higher credit score indicates better reliability, since lenders are considering your past financial activity to be indicative of your future activity. As such, a lower credit score may mean you’ll be charged a higher interest rate for your car loan (we’re talking up to 20%). Does that mean there is a minimum credit score to get a car loan? Not necessarily. It will vary from lender to lender.

Can I still get a car loan with bad credit?

It’s certainly possible to figure out how to get a car loan if you have bad credit—you just need to go about it the right way. One of the best things you can do is partner with a specialized lender that is willing to work with customers who have bad credit. To find one, start with a bad credit auto loan direct lender like This will allow you shop around and get multiple offers to find the right lender for your situation.

Want a full breakdown? Read our 5 Steps to Find a Car Loan with Bad Credit.

Think You Don’t Have Enough for an Auto Loan Down Payment? Think Again

Many car owners-to-be think that if you don’t already have the money for a down payment, you’re out of luck when it comes to getting an auto loan. But in many cases, that may not be true! Here’s what you need to know about getting an auto loan with a small down payment, or even no down payment at all.

What Is an Auto Loan Down Payment?
A down payment on a loan is a kind of guarantee to the lender that you will be able to follow through on your loan. Whether or not a lender requires a down payment on a loan will depend on the lender’s policies.

How Can You Get an Auto Loan without the Money for a Down Payment?
The way it works may vary from lender to lender. Some lenders offer a loan without asking for a down payment, but some lenders may require you to put down up to $1,000, or else 10% of the sales price. If you are trading in a car, another option is to use your trade-in as a down payment. In the end, you’ll need to work with your chosen lender to determine what your specific down payment requirements are going to be, but know that it is possible to get an auto loan with less-than-perfect down payment choices.

What’s Next?
Once you find a lender that will meet your down payment needs, you’ll need to figure out what your loan amount should be. Use an auto loan calculator to figure out the amount based on your payment preferences. You can also figure out what type of interest rate to expect and what your payment amount would be, given a certain loan amount.

Learn More
For help securing an auto loan, work with to find the best lending solution for your needs. You can also check out’s resources to learn about the process of the basics of auto financing.

Understanding More About Direct Auto Loan Lenders

When coming across online auto loan lending companies, you might be surprised to learn that very few are actually direct lenders. Many of these online entities are brokers or companies who sell applicant data to other brokers or direct lending companies who can issue a loan.

Here at, our stance has always been, “Why have a middleman?” We feel that direct lending gives our applicants more informed options when choosing the right loan for them. Worried about direct lending having a difficult or lengthy application? Don’t be – the direct lending application is very similar to indirect lending and takes just as much time.

How It Works
For direct lending, a loan application is completed by an applicant online. The application is then transmitted to the direct lending company’s automated application processing system. From there, a credit bureau report is accessed and a credit score is computed.

Based on this information, the direct lending company’s proprietary automated underwriting system can then approve or decline the applicant. The applicant is then notified of the direct lender’s assessment and can determine if they need to find another lender or wish to continue with the rate they’ve been offered.

Next Steps 
All credit decisions made via the direct lending company’s automated application processing system are valid for a 45-day period. Declined applicants will receive proper notification indicating their declined application.

Want to Apply? 
Get started on your new car loan today. With just a couple clicks, you can be on your way to owning the car of your dreams. Apply with our direct lending application today!

Car Loan Financing

A lot of people who need to buy a new or used car find themselves in an interesting position.  When the financial markets crashed back in 2008, things changed quickly.  It made getting an auto loan a lot more difficult.  Most families cut back on what they considered “like to have” and held onto their money.  Others just didn’t understand how to get a car that they could afford and ended up with either too high of a monthly car payment or a car that was much more expensive to own than they could afford.

The recession was tough on families.  Millions of people ended up without a job.  Although things have gotten better, they are not where they should be.  Interest rates have dropped and there is an opportunity to improve your transportation situation by getting a current car.

The biggest mistake that many people make when they are trying to get a car loan is that they don’t think realistically about what they can really pay each month.  This is what happens when you let emotions carry you away because the car salesman oversells you on what you need.  So what you need to do is think and plan in advance, before going to the dealership.

The best way to begin the car financing process is to go in with a particular price that you can afford and use a payment calculator to provide you with an estimate of what your maximum out-the-door price should be.  You can then research the cars available at this price which will make your shopping smarter.  You will know ahead of time which vehicles are worth taking home and which ones are either poorly made or overpriced.  This is an essential step.


When it comes to financing a car, it’s most convenient to go online.  If you want to compare rates and terms that best fit your needs, there is no better way to do so than to investigate your options before you go to the dealership.  Without a doubt, you are going to find the most affordable payments on the internet, especially at which does the shopping for you.   With just one application you can get up to four loan offers to choose from.  Enjoy the convenience of doing your financing research online and find out how easy it is to make a good choice that works for you.