A credit score of 632 falls within the fair credit range [1]. While this score may not be ideal, it does not necessarily prevent you from obtaining a car loan [2]. However, it is important to note that a lower credit score typically results in a higher interest rate on the loan [3].
Key Facts
- A credit score of 632 is considered to be in the fair credit range.
- With a credit score of 632, you may be able to get a car loan, but you are likely to receive a higher-than-average interest rate.
- The average car loan interest rate for someone with a credit score around 632 was approximately 7.14% for a new car and 11.41% for a used car in 2021.
- Lenders may also consider other factors such as income, employment history, and other debts when determining loan approval.
- It is recommended to work on improving your credit score to reach the next tier, which is typically around 660, as interest rates tend to decrease by about 3% in that range.
- Shopping around for the best loan terms is important, as interest rates can vary significantly among lenders, especially for borrowers with below-average credit scores.
- It is possible to get an auto loan with a 632 credit score, but it is important to budget for car insurance as required by the lender.
Interest Rates for Fair Credit Scores
In 2021, the average car loan interest rate for individuals with a credit score around 632 was approximately 7.14% for a new car and 11.41% for a used car [3]. These rates are higher than those offered to borrowers with excellent credit scores.
Other Factors Considered by Lenders
In addition to your credit score, lenders may also consider other factors when determining loan approval, such as:
- Income
- Employment history
- Existing debts
Improving Your Credit Score
If you are not satisfied with your current credit score, there are steps you can take to improve it [4]. These include:
- Paying your bills on time
- Keeping your credit utilization low
- Avoiding unnecessary credit inquiries
- Building a positive credit history
Shopping for a Loan
It is crucial to shop around for the best loan terms, as interest rates can vary significantly among lenders, especially for borrowers with below-average credit scores [5]. By comparing offers from multiple lenders, you can secure the most favorable loan terms possible.
Budgeting for Car Insurance
If you decide to finance a car with a 632 credit score, it is essential to budget for car insurance, which is required by the lender [6]. You can use resources like Jerry to compare rates from various insurance companies and find the best coverage for your needs.
Conclusion
While a 632 credit score may not be ideal, it is possible to obtain a car loan with this score. However, you should expect to pay a higher interest rate than borrowers with better credit. By improving your credit score, shopping around for the best loan terms, and budgeting for car insurance, you can make the car-buying process more manageable.
Sources
- Is 632 a good credit score for a car loan?
- 632 Credit Score: What You Need to Know
- What does a 632 credit score mean?
- Building your credit
- Take your 632 credit score with a big grain of salt
- Is 632 a good credit score for a car loan?
FAQs
Can I get a car loan with a 632 credit score?
Yes, it is possible to get a car loan with a 632 credit score, but you may have to pay a higher interest rate than borrowers with better credit.
What is the average interest rate for a car loan with a 632 credit score?
The average car loan interest rate for someone with a credit score around 632 was approximately 7.14% for a new car and 11.41% for a used car in 2021.
What other factors do lenders consider when approving a car loan?
In addition to your credit score, lenders may also consider your income, employment history, and existing debts when determining loan approval.
How can I improve my credit score?
You can improve your credit score by paying your bills on time, keeping your credit utilization low, avoiding unnecessary credit inquiries, and building a positive credit history.
Why is it important to shop around for a car loan?
Interest rates can vary significantly among lenders, especially for borrowers with below-average credit scores. By comparing offers from multiple lenders, you can secure the most favorable loan terms possible.
Do I need car insurance if I finance a car?
Yes, car insurance is required by the lender if you finance a car.
How can I find the best car insurance rates?
You can use resources like Jerry to compare rates from various insurance companies and find the best coverage for your needs.