Credit rating is a term that many know, but don’t quite understand. What is this number and how do you interpret it?
Today, we’ll help you understand what your credit rating means for an auto loan and what its influence on the loan is.
A Number Between 300 and 900
The credit rating a type of score that allows financial institutions to evaluate your creditworthiness. A lower credit rating means a lower probability that you’ll pay your bills, whereas a higher rating suggests that you’re more likely to pay back a loan.
The number is somewhere between 300 and 900, but it’s divided by category:
- 760–900: Excellent rating
- 725–759: Very good rating
- 660–724: Good rating
- 560–659: Average rating
- 300–559: Low rating
An Influence on Loans
Your credit rating can, of course, bring lenders to deny a loan application. That’s usually the case for consumers with a low rating. In other cases, your rating will mostly have an impact on the proposed interest rate when calculating for an auto loan.
A lower rating could then cost you more, without necessarily stopping you from getting a loan. A rating between 560–659 or even 300–559 could lead many financial institutes to deny your application.
However, there isn’t a minimum credit rating for an auto loan: it all depends on the lender. With a credit agency like L’Ami Auto Crédit, you can find an auto credit deal, whatever your rating is.
With our Chicoutimi, La Malbaie, Baie-Comeau, Alma and Sept-Îles professionals, get an auto loan adapted to your needs. Auto credit, the solution to improve your credit rating!