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Is a 510 credit score good for car loans?
I’m not really sure what qualifies a good credit score, but I need a car loan. Will I be able to qualify for a good car loan with a 510 credit score?
Joshua Levy · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Unfortunately, a 510 credit score qualifies as subprime, so you may have a hard time securing a good car loan. On average, subprime borrowers face annual percentage rates (APR) of 10% or higher**.
That said, try not to worry. Lenders consider many different factors when reviewing your loan application, and you can always take time to raise your credit score.
If you need to apply for your loan immediately, here are a few important aspects of your application:
- Debt: Borrowers with high debt are less likely to get a decent loan since they already have a large financial burden.
- Income: Applicants with a consistent income are more likely to be approved.
- Loan amount: Asking for a small amount is less risky to your lender, but it also has less benefit for them. Consider asking for a reasonably-sized loan that’s well within your ability to pay.
- Loan term: Short-term loans require higher payments and long-term loans cost more as a whole. Depending on your financial situation, lenders may be more or less willing to accommodate your preferred term.
If you can wait to take out a loan, it may be best to take some time to build your credit. Simple steps like using less credit and paying off your credit card on time are easy ways to get started. Another great tip is to use your
credit card for car insurance
and pay it off on time. The consistency should reflect well on your record credit score.If you’re worried about the monthly cost of a car loan, offset the price by saving on car insurance with
Jerry
. A licensed broker, the Jerry app helps users save an average of $887 a year on car insurance. Just download the app, answer a few questions, and immediately start comparing competitive quotes from over 50 top providers, like Progressive and Nationwide, for free.MORE: How to get a cosigner for a bad credit car loan
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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