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Securing an auto loan in Colorado if you have bad credit

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Securing an Auto Loan - Your Credit Report Determines Your Loan

Like many car buying consumers, especially if you haven't had to get a loan recently, you may be concerned what interest rate can you secure when looking for financing.

Here is some helpful advice clipped from an article by AutoTrader.com that will help you know what loans you can expect, based on your credit:

"Lenders use a scoring system to determine the amount of risk associated with your loan. Ranging from a low of around 330 to a high of 830, the scores are calculated by looking at various factors including payment history, amounts owed, length of credit history, balance to credit limit ratio, foreclosures and bankruptcy.

Any score below 580 is considered a bad credit risk. If your credit score is between 580 and 620, you can probably secure a loan,*** but it will likely come with a very high interest rate and/or require a large down payment; many lenders consider 620 to be the dividing line between good and bad credit...

A score between 680 and 720 is considered very good and will generally land you a traditional loan with as little as 5 percent down.

A score of 720 or better can secure the best deals, such as near-zero percent financing and more favorable loan terms. If your score is below 700, don't be discouraged; you still have time to improve it. "

The Fresh Start finance team is trained to read your credit report and match your credit with the loan program that is best suited to fit your credit score. Fresh Start's exclusive dealer has bank financing available through some of the largest auto loan lenders in the country, and is teamed up with most of the major auto loan lenders and Colorado's largest credit unions. In addition, for those whose credit scores do not qualify for a loan, Fresh Start's exclusive dealer has financing available with a dealer financing program.

There is a loan for your credit! Give Fresh Start a call at 1-866-64-FRESH (1-866-643-7374).

***A loan is available for credit scores between 580 and 620 when you contact Fresh Start.

What is a Good (or bad) Credit Score When its Time to Buy a Car?

If you need to buy a car, and you know you will have to take out a loan, you know that it all rides on an approval from a bank or lender.

Each lender has an underwriting department and, since they can't grade you by a personal interview, your credit and application are scrutinized for the loan approval.

So what is it that the lenders are looking for?

Each lender looks at your credit and has a system to rate your credit ranging from very good to very bad credit. Generally this credit scale is:

720+ Prime Credit

680+ Good Credit

640+ Marginal Credit

600+ Sub-Prime Credit

580+ Poor Credit

525+ Bad Credit

480+ Very Bad Credit

Do you know your credit score? If you are considering getting an auto loan, you may want to check your credit first. If there is anything incorrect on your credit report, that may negatively affect your credit, it may be in your best interest to correct the issue first. The site Annual Credit Report assists you in checking your credit with each of the three credit bureaus each year.

Your interest rate is directly related to your credit score. You can find out which bank lending programs are available for your credit, in Colorado, by applying for a car loan online or calling our Fresh Start financing consultant today at 1-866-64-FRESH.

Where do I start with repairing my Credit?

For those who are frustrated with their bad credit, limiting their ability to get an auto loan, but want to work on it, Fresh Start has info that will help.

If you're trying to improve your credit score, you should understand what components make up that score. An article, from Edumunds.com breaks down your credit score to five sources:

  • Payment history, 35%
    • Have you made your payments on time for your credit cards, car payments or a mortgage. If you're looking to build your credit, the first part is catching up on past due accounts and keep them paid on time.
  • Amount owe, 30%
    • Do you owe a lot of money already? If you are looking to get another car loan when you are already paying for an expensive car, or if your credit cards are maxed out lenders will be concerned how you will also make the payment on their loan. The financial advice of many hold true, pay extra principle in your payments rather than the minimum balance.
  • Lenth of Credit history, 15%
    • You may want look at your credit report and look at your oldest line of credit. Some loan programs require that you have at least a year or two of credit history. First time buyer programs are a good option for those who have good, but not much, credit.
  • Credit history, 10%
    • Have you been religiously making payments on time for loans and credit cards? Lenders can look at your credit and see when you may have had some hardship. It takes time and work to improve your credit history. Keep your "Eyes on the Prize" each day, changing your spending habits if necessary, to improve your history.
  • Types of Credit, 10%
    • A variety of types of credit, paid on time, will show your responsibility as a buyer to pay for your purchases. A car loan, a mortgage, a revolving credit card are all different types of credit.

With a concerted effort and understanding of credit, it is possible to rebuild your credit and credit score over time!