Credit Score Needed to Buy Car in New Jersey
Purchasing a car is simple on the off chance that you have the upfront money but if you are looking to finance a car, your credit score is very important. It is a three-digit number and it does not only determine your loan eligibility but other factors like loan terms, interest rates, and monthly payment amounts.
The credit score is based on your money related to conducting and actions as a consumer. However, the minimum credit score needed to buy a car in NJ is 660 and above. It can be less in the case of buying a used car.
Some of the factors that determine your credit score are:
- Payment history
- Credit utilization
- Number of recent inquiries
- Variety of accounts
However, payment history and credit utilization are the most important factors as they tell about your ability to repay loans on time.
FICO (Fair Isaac Corporation system) is the most commonly used credit score system that combines all the information from major credit bureaus and gives a score that can range from 300 to 800 and above. FICO score ranges are as follow:
- 579 or lower – this means that a person has bad credit and in this case, it is difficult to receive a loan.
- 580 to 669 – this means that a person is a subprime borrower and people with this score generally receive higher interest rates on loans.
- 670 to 739 – this means that the credit score is fair and the people with this score are considered to be trusted and acceptable borrowers.
- 740 to 799 – this is above the average consumer credit score. It is a very good score and the people with this score get better rates and deals.
- 800 or higher – this is the highest level of FICO rating and is considered an excellent score. The individuals with this score receive the best rate on any type of loan.
So, the higher the credit score, the higher will be your creditworthiness.
You can also improve your score by making some adjustments in your financial habits like paying EMIS and credit card dues before the due date and maintaining a good loan history.
