Having a credit rating of 700 is considered to be in the “good” or “prime” category for financing, making it a great score for buying a car. It's always a good idea to get your credit score in the best possible shape before applying for an auto loan, but if you're already in the 700 range, you're in good shape. Those with very low credit scores may have difficulty qualifying for an auto loan and will likely pay the highest interest rates. Borrowers with scores between 700 and 709 should spend some time building up their credit to move into the “superprime” rank.
Your credit score is the three-digit number that lenders use to determine how likely you are to repay the money you borrow. With a credit score of 700 to 709, you'll have plenty of options for an auto loan, although you may pay higher interest rates than those with higher scores. According to Experian, borrowers with a credit score of around 700 would pay about 4.68% for a new car, compared to 6.04% for a used car. A late payment or large credit card balance can lower your score from exceptional to good, so it's important to keep an eye on your credit report and make sure you're making payments on time.
If car financing from a bank or credit union is approved, borrowers with subprime credit pay four to five times higher interest rates on a comparable loan. The average rate for a used car loan in the 700-709 credit rating range is 5.58% (50% higher than the average rate for a new car). Overall, having a credit score of 700 is considered good and should give you plenty of options when it comes to getting an auto loan. It's important to keep an eye on your credit report and make sure you're making payments on time so that you can maintain or improve your score.
