Interest rates and credit/fico scores

[Skooby]

Do they go hand in hand?

Let's say there's a first time buyer for a car with a fico score of 710-720.

What would be a good interest rate for that?

[poundwise]

Though standards vary between lenders, the de facto standard seems to be that the best rate goes to borrowers with FICO scores of 720+.

Here is a brief article on the subject:

Mortgage | credit score

[autoxer]

myFICO - FICO Credit Scores | Get a Free Credit Report Online has some estimates for different FICO ranges, just click on the auto loan tab in the middle of the page.

But when you are ready, you should shop around to see who has the best rate.

[Coleroo]

would you like some real life numbers too?

In 2004 i bought a new car (first time buyer) and was given 10.99 % (72 months) my FICO then was 658. I had no idea what i was doing, i just signed on the dotted line.

In March 2005 i refinanced the above loan with my bank (had a good relationship with them) and I was able to get 5.2 % on a 48 month loan. I think i was around a 675 at that time?

In August 06 we got a *used* (new car with 2k miles on it) 36 month loan and i talked the dealer down to 6.49 % (it helped that I had a preapproved package from another company with 6.99 rate already). My FICO was a 726 at that time. I hated the rate I got but we ran of of time to continue "shopping around"

Be careful if you are a first time buyer - if you dont know your stuff you can get cheated. Your interest rate for a car depends on many factors...

your willingness to shop around at different banks
your ability to talk down a rate
your fico score / credit history
length of car loan?
new or used?
market timing

I would always recommend going directly to a private bank to get loan funding and then going to the dealer instead of putting yourself at the mercy of letting the dealer find you a loan.

And I agree too... 720+ does tend to get the premium rates.

[Ima saver]

I would say the higher your score, the lower your interest rate will be.

[ajknox]

I definitely agree that a higher score would lower your interest rate. In my case however the strange fact is that I bought a used car (a 2002 honda with about 30k miles on it) and my score was around 640 and i got it financed at 4.49% even though i was a first time buyer. I thought it was a great deal but i think i got it because i shopped at multiple locations and I was adamant that i would not pay anymore than a certain number i had in mind.

Also, it is always a shot if you also check with your local credit unions. They almost always have lower rates based on my experience.

[George23]

Yes, it has been my experience too that 720+ seems to get the best rates. My credit score is 723 and according to Experien that is right at 49th percentile (exactly average) so it makes sense that those with above average credit scores will get above average rates.

[jamai]

it all depends on the lender. but also don't forget you can negotiate and try to bring the rate down!

[parafly]

720 used to be the "gold standard" for getting the best rates. In recent years, that standard has moved up to 750.

Obviously, everything is dependant on the lender.