Credit scores are used to give lenders insight into how a borrower might do with new credit, based on their repayment history and other factors. The most common credit scoring model is FICO, and it ranges from 300 to 850. With a low credit score around 300, you may have a harder time getting approved for a car loan.
Is a 300 credit score bad? A credit score of 300 doesn’t necessarily disqualify you from a car loan, but it does mean you have bad credit. This is the lowest credit score and puts you in the deep subprime category. However, it could also mean that you are new to using credit or haven’t used much of it. This is called having a thin credit history, and it can make getting a car loan a little more difficult. However, a car loan may be possible depending on your situation.
You see, there are two types of bad credit, situational and habitual, and depending on why yours is bad, you might not be out of the running for a car loan. For example, if you have a thin record and are applying for your first car loan (situational bad credit), you may find it easier to qualify than if your credit score is low due to poor loan management. and previous credit opportunities (usual bad credit).
Obtain a car loan with a FICO of 300. When your credit score is around 300, you usually have two options for an auto loan, a buy here pay here dealer or a subprime lender.
A BHPH dealer is called an internal lender, and they are both a lender and a dealer. These lots only sell used cars and can be a good option for borrowers with a 300 credit score, as BHPH dealerships don’t always check your credit. Instead of a credit check, lenders look to see if you can afford the loan by verifying your income and employment and requiring a large down payment.
Subprime lenders, on the other hand, look at more than your credit score to determine auto loan eligibility, but they still consider it. With a low score, you can expect to work with a special financial dealer and provide proof of income, employment, and residency, as well as proof of a working phone, personal references, and down payment.
Start your auto credit search with us. With a credit score of 300, a borrower probably doesn’t qualify for a traditional car loan. So finding the right lender to work with to get the car you need is essential. Rather than looking all over town for the right lender, start today by letting Auto Express Credit put you in touch with a dealer in your area who specializes in helping consumers with credit difficulties.