How to Get a First Time Auto Loan with a 681 Credit Score

Getting a first-time auto loan is an exciting time, and several factors determine whether you're approved for a loan and the interest rate you receive. Applicants with a low credit score typically obtain higher rates, whereas people with a credit score in the 700s pay the best rate. A 681 credit score is considered average by lenders, and you can get an auto loan with this rating. But to improve your chances of an approval, it's best to know the lender's guidelines.

Instructions

1

Provide employer information. Expect the finance manager of a dealership to verify your income and employment history. Come prepared. Bring copies of your most recent paycheck stub or tax return.

2

Shop around. You don't have to use your dealership's finance companies. Secure your own financing in advance to obtain a preapproval and possibly lower rates. Visit your bank or credit union and complete an application for an auto loan. Compare this rate to the dealership's finance package.

3

Lower the loan balance. Although a 681 credit is average, it doesn't justify the best interest rate on an auto loan. Higher rates equal higher payments. Consider offering a down payment on your new automobile to reduce your loan balance and payments. Put down at least 10 percent.

4

Get a co-signer. Find a co-signer with a higher credit score to help you get a lower rate on the auto loan. The finance company takes both scores and calculates the average (add both scores and then divide by two) to determine the interest rate. For example, having a co-signer with an 800 credit rating creates a median score of 740.