How to get a 720 credit score car loan



When you buy a car loan with a credit score of 720 or higher you are in a strong position. A credit score of 720 is considered good by almost every lender. But while 720 is a good enough credit score for a car loan, if you can improve your credit score before you apply, you can potentially cut your costs and save money.

Here are the steps you can take to maximize your credit score and buy the best car loan.

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Check your credit report

Before applying for a car loan (or even if you are opting for a personal loan to buy a car), make sure that your credit report is correct. Many people find errors in their credit reports, and some errors can lower your score. You don’t want to get stuck paying a higher interest rate just because of a mistake.

You can get copies of your credit reports from all three major credit reporting agencies by visiting If you find inaccurate information, follow the agency’s online process to request corrections.

Check your creditworthiness

There are many ways to check your credit score for free:

  • Free Credit Score Website: Several consumer websites and financial institutions offer free credit ratings online. These are usually VantageScores.
  • Free FICO score from your bank or credit card issuer: Some banks and credit card companies, including Bank of America, Wells Fargo, and Citi, offer free FICO scores to their credit card holders when they log into their account online. Discover gives everyone a free FICO score, even if you don’t have a Discover account.
  • Free FICO Score From A Credit Bureau: Experian offers free FICO scores to anyone who signs up for an account (free or premium).

When you check your creditworthiness in multiple places, don’t expect the results to be all the same. That’s because your score can vary depending on which agency calculates it and which model (FICO or VantageScore) it uses. To make matters even more interesting, there are several versions of FICO and several different versions of VantageScore. So don’t worry if you see a number of scores.

The main reason to familiarize yourself with your score before applying for a car loan is that you may be able to improve it before applying. A credit score of 720 is near, but not quite, the excellent credit range.

Virtually all free credit scores contain information about the factors that affect your score. For example, if your creditworthiness is being affected by your credit load (how much revolving debt you have compared to the credit limit on your credit cards), you can call your credit card issuer and ask for an increase in the limit. As long as your balance doesn’t increase, the higher credit limit can improve your score.

Buy the best credit

Here’s what steps to take when applying for a car loan.

Apply to multiple lenders

Apply to at least two or three lenders (or many more if you’d like) to compare terms. Make sure to apply for pre-approval for the loan when applying (not pre-qualified). This means that the lender will review your personal information and do a credit check.

Find out the lenders’ restrictions

Some loans are only available for purchasing a car from a specific dealer or manufacturer. Some loans are only for used cars, while others are for new cars. Most pre-approvals have an expiration date. Make sure that you are aware of the restrictions that come with every loan that you apply for.

Apply within 2 weeks

Typically, your score can drop a few points each time you apply for a loan. Exceptions are applying for certain types of credit, including auto loans. The credit rating agencies understand that you need to apply to multiple lenders to compare quotes so that you all get a price-shopping window. During this window, all auto lender requests are counted as a single hard request for your credit score.

Car loan requests are completely ignored by FICO for 30 days. The interest buying window is then between 14 and 45 days, depending on the scoring model. Lenders have to pay for scoring models, and they don’t update every time a new one is released. Since you don’t know what score a lender will use, it’s best to apply for and compare loans within 14 days – the smallest interest buying window – just to be on the safe side.

Consider a wide variety of lenders

Don’t forget to check with the merchant in addition to any banks, credit unions, or online lenders you are considering. Sometimes the dealer is ready to beat or beat any financing offer you accept. However, this is difficult terrain. Car dealerships are notorious for adding unwanted costs to your contract, such as prepaid maintenance or additional insurance coverage.

Shop under your loan amount

All cars require maintenance and fuel (either gas or electricity), plus you pay taxes and registration fees. And then there is car insurance. So keep in mind that the loan isn’t the only line item you add to your budget. When deciding how much car you can afford, consider the other running costs as well.

Protect your funds

A car loan does not add to your loan utilization rate as it is based on a revolving loan. But it plays an important role in:

  • A healthy mix of loans (the types and variety of loans you use)
  • Your payment history (the most important factor in your creditworthiness)
  • Your credit age (after you have paid off your car loan in good condition, it will have a positive effect on your creditworthiness for another 10 years)

This is why it is important to be responsible with a car loan and to make sure what you are getting yourself into before getting one.


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