Auto Financing for New and Used Vehicles - InTouch Credit Union (2024)

FAQs

What credit score do credit unions use for auto loans? ›

FICO is an acronym that stands for: Fair Isaac Corporation, the company that developed the FICO® credit scoring. FICO® credit scores are the auto industry standard for determining a potential buyer's creditworthiness.

After researching the car finance industry, we think that myAutoloan is best for those with bad credit. The company offers auto refinancing, lease buyouts and loans for new and used cars. Additionally, the marketplace only requires a credit score of 575 — making it easier for subprime borrowers to get a loan.

Get Car Financing

Typically, a bank won't finance any vehicle older than 10 years, even if you have good credit. If you don't have great credit, you may find it difficult to finance through a bank, even for a new car.

Car Loans with a 525 Credit Score

As a result, your odds of getting approved for a decent car loan are slim. You will need to compare your options carefully and consider either placing a bigger down payment or purchasing a vehicle that's less expensive.

In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.

Boost Your Credit Score

Your credit score is crucial to determine your eligibility for a no down payment car loan. Most lenders require a FICO credit score of at least 680 before you can qualify. If your credit score falls below 680, improve your credit score before you apply to help you qualify in the future.

Though the options can feel limited at times, there is no specific score required to receive a car loan, so possibilities exist for any credit score. That said, there may be fewer options available, and the terms may be less appealing if your score is on the lower end.

PenFed Credit Union is the best overall auto loan lender thanks to its wide selection of loan types and competitive rates, according to our research. It offers rates for used cars as low as 6.49%, and another one of our picks, OpenRoad Lending, offers rates as low as 1.99%.

Why should I use credit union for car loan? ›

Lower interest rates: Interest rates on new-car loans from credit unions average more than 2% lower than bank rates. 5. Fewer requirements: Once you are a member of a credit union, it can be easier to get a car loan than from a traditional bank, especially if you have a poor credit score.

NerdWallet recommends financing new cars for no more than 60 months and used cars for no more than 36 months. These maximums can help you avoid some of the negative outcomes of long-term loans.

Capital One Auto Finance only refinances cars, light trucks, minivans and SUVs that will be used for personal use. Vehicles must be no older than 10 years and have an established resale value.

Financing an older car can be a viable alternative for some car shoppers, although it might not be as simple as financing a new one. Getting a loan can be harder, interest rates could be higher, and operating costs have the potential to offset any initial savings.

The base FICO score is also called FICO Score 8 or 9. It's not designed specifically for auto loans, but many lenders use it. It's a number between 300 and 850, and a higher score means that a person is more likely to make loan payments on time.

Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.

Why are you providing FICO® Scores? Nearly all lenders in the U.S., including Visions Federal Credit Union, use FICO® Scores, as the industry standard for determining credit worthiness.

FICO score 8 and 9 are commonly used for student loans, personal loans, medical loans, credit card lines and auto loans. However, there are industry-specific FICO versions for certain types of debt as well, including auto loans, credit cards and mortgage lending.