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How to get approved for a car loan with a 600-credit score

How to get approved for a car loan with a 600-credit score

If your credit score is 600 or below and you need a new car, you have your work cut out for you. The average credit score in Canada is around 650, but this does not mean you cannot get approved for a car loan. You just need to follow our tips to come out on top.

Reviewing your credit report

The first step is gaining insight into why your credit score is in the 600 range.

There must be something that is weighing your score down, but the only way you will know is by signing up for free credit monitoring services like Credit Karma.

After you have gained access to these credit monitoring services, start by noting which of your accounts are either in collections or past due.

If none of your accounts are in collections or past due, then you must look at the total amount of debt you are carrying in comparison to the total amount of credit that is available.

This is referred to as your credit utilization rate, and if it is too high, it will negatively influence your credit score.

The last thing that may be causing your low score is inaccurate information inside your credit report; you could have been the victim of identity theft.

If there are errors inside your report, the credit reporting agencies must remove them, but you must first notify the agency through their official dispute channel.

Do you have a sufficient budget to service a new car loan?

Once you have gone through your credit report and identified the causes of your low score, the next step is determining how much money you can afford to put towards a new car payment.

Without a budget in place, you cannot know whether you have enough cash to service your existing debts plus any new obligations you take on.

If you are not sure how much to set aside, plan on spending at least $500 on the car payment itself and factor in insurance or other running costs.

With fuel prices on the rise, you should consider making the switch to an electric car.

The days of cheap gasoline are gone, and the sooner you make the transition to an electric car, the more cash you will save.

Where to get approved for a car loan with a 600-credit score

There are numerous websites that promote bad credit car loans. These websites are great for research purposes, but if you are serious about getting a car loan, you need to work with a dealership in your area. These dealerships will get to know you and your personal situation to determine which lender is the right one for you.

You also benefit from working with their in-house credit professionals by going through a local dealership.

These individuals will show you what steps you must take to increase your credit score into the 720+ range. The dealership already has cars in their inventory you can test drive, so you can go to the dealership right now and drive away in a new car, so why not head over to the local dealership right now?

If you need help or advice on anything to do with auto loans in Ancaster, contact Car Nation Canada today, we can help!

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