For most people, a vehicle purchase includes getting approval for a loan. Those with below-average credit scores (or who haven't established a credit history yet) will find it more difficult to get approved - but there are definitely some options out there. Working with AutoFair Subaru's experienced financing team can take away any uncertainty you're feeling and make the process smoother and less stressful. There are loan programs out there to fit a bad-credit situation - you just may need some professional guidance to find the one that works for you.


What is a FICO credit score? Why is it so important?

Your FICO credit score is a three-digit number that indicates your credit quality based on your financial behavior (both good and bad) dating back to the first time you were issued credit. It will also list if you've ever filed bankruptcy, had a vehicle repossessed, or lost a property to foreclosure. The FICO system evaluates everyone's credit based on the same factors, ensuring a level playing field for all. The information in your credit reports gives potential lenders a way to assess how likely you are to repay your loan so that they can decide whether to extend credit to you. A credit score can range from a low of 300 to a perfect 850, and there are five categories: poor, fair, good, very good, and exceptional.

Is there a special kind of loan for people with credit challenges?

You've probably heard of subprime auto loaning: lending specifically for those with less than stellar credit. If your credit score is lower than 620, you are within subprime loan territory (although individual lenders can specify their own cutoff points). The caveat will be a higher interest rate, because the lender assumes more risk with a borrower who hasn't proven they can consistently pay their bills. That said, the goal is to get the loan. Once you've done that, you can work to raise your credit score and eventually refinance to a lower APR. At AutoFair Subaru, we work with a variety of lenders, several of which offer subprime loans.

How can I improve my credit score?

Bringing up your credit score will take some discipline in a few related areas. You'll need to limit any revolving debt to the necessities, always pay your bills on time, pay off as much debt as possible, keep the balances on your credit cards low, and don't apply for credit you don't need. You should also closely monitor your credit report to make sure it's accurate. The three nationwide credit reporting companies are Equifax, Experian, and TransUnion, and you are entitled to a free credit report every 12 months from each of them.

What can I do if I see an inaccuracy in my credit report that's affecting my score?

It's very important that you get the error corrected. You'll need to contact the creditor and provide them with proof that you've paid off the debt in question. Be sure to check all three of the credit reporting agencies' reports for errors and take the steps to correct each one that you find.

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