The 0 % auto financing is one of the best offers available on car leasing or getting a car with monthly or periodic credit payments.
More often than not you will come across the options of auto financing with 0 % interest on your total credit or get a rebate from the dealer of the car and pay some percent on your total price of the car. You need to compare the overall cost that you will incur. At a number of times, financing through interest may be lower.
To be able to acquire a 0 percent interest on your car or auto financing, you will be required to have a very good or an excellent credit score. If you have a score above 700, you have chances of securing a 0 percent auto financing offer, however, if you have a credit score of 750, and above, your chances are very high.
Explanation of credit score ranges
It is important to know the category that you fall into when it comes to credit score for you to be aware. The range of a credit score can go from 300 to 850. Always remember that the higher your score, the higher the chances of you to qualify for a loan. There will also be instances where a financing company is okay with 650 scores, while the other is fine with a 750 score. It will all depend on the lender itself.
A lender or a bank will check your credit score if you qualify for the application that you are requesting. Here are some of the credit score ranges that you should know.
Bad credit score
People with a credit score below 579 is known as high risks. Foreclosures, poor payment history, and bankruptcies are the reasons why people fall into this category.
Good credit score
A good credit score ranges from 680 to 719. People with this credit score can expect approvals and interest rates that are better.
A very good credit score ranges from 720 to 799. People with this credit score is known to be small risks, and they often get loan amounts that are higher than usual.
An excellent score ranges from 800 and above. Financial freedom is expected to people with this score.
How are credit scores calculated?
The weight of each of the five categories are; 30% of amount owned, 10% is for the new credit, 15% accounts for the length of credit history, 10% is the credit mix and the last 35% accounts for the person's payment history.
The FICO score takes into consideration positive as well as negative aspects of the credit report. The percentage or the weight of any of the categories mentioned above may differ from a person to another depending upon the information available in the credit report.
The FICO score takes all of the information from your credit report. However, the banks or any other lending institution might look at your income, type of credit and employment history when you apply for a loan or mortgage.
Once a certain lender asks for a client's credit report, they can also ask for the Fico score. Other sources say that your Fico score will include 35% of your payment history, 30% of your credit utilization, and 15% as to how long have you been borrowing.
Lending Club financing options based on credit score
However, for the lending club, you will be required to submit some information related credit. Your credit score will be given some serious consideration before you are allowed to get any money or credit from their pool of lenders. If you have a lower credit score than 680, you might face some difficulty in getting the credit.
Along with your credit score, your current job and salary are also considered by the lending club to see if you have the ability to pay back the loans. The lending club is a marketplace where profits are provided to the lenders and the borrowers need for the cash or money is fulfilled.