What is the Capital One Auto Finance minimum credit score requirement? Does Capital One Auto Finance have a minimum credit score borrowers must have in order to qualify for financing? These are valid questions persons wishing to finance their next car with Capital One Auto Finance should be looking for answers to.
Lenders across board take a borrowers credit score into consideration before granting them loans. It is so because they want to know if a borrower can really pay back the loan so they don’t end up giving out loans to persons who cannot pay.
They also use it to determine ones interest rate or APR, hence it is only normal that you find yourself asking this all important question.
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Understanding What Credit Score Is About
Credit score like you’re aware of is expressed in numbers (usually three digits) showing a person’s creditworthiness. It is mainly used by lenders to determine whether a borrower qualifes for the loan they are requesting for.
Because obviously no lender or no one will want to make losses hence they do so to determine how risky the loan they are offering is so they can fix interest at a rate that fits your situation. They obtain these scores from either of the three main credit bureaus ie. Equifax, Experion and TransUnion.
Ideally, the scores are within the ranges of 300 and 850. Scores ranging from 670 to 739 are considered as good, 740 to 799 as very good, 800 to 850 as excellent and anything below 670 is bad,
The higher your score the better the chances of getting a better terms as compared to one with a not so good credit score. But does Capital One Auto Finance have a minimum credit score?
What Is The Capital One Auto Finance Minimum Credit Score?
Unlike other lenders, Capital One Auto Finance does not have a minimum credit score. Rather, they look at the borrowers entire credit profile. That is, it looks at your entire financial history and not just some 3 digit score.
Your credit profile then enables them to provide you with an offer that suits your situation. Hence yo be on the safer side, you may want to relax and build a good credit profile before applying for financing at Capital One Auto Finance.
What Constitutes A Credit Profile?
Basically, your credit profile has the following;
- Your payment history- it looks at how regular you make payments, whether you make prompt payments or not. Hence to ensure that you have a good payment history, you may want to stick to paying your debts on time because this alone Constitutes about 35% of your credit profile.
- How much you owe- the amount owed also takes 30% of your credit profile. It is also referred to as credit utilisation and you must always try to ensure that you have a good credit utilization rate.
- Your credit history which I believe is self explanatory
- New credits- what other new credits do you have? It looks at how frequent you go for new credit.
- Credit Mix- it looks at the various forms of credit you have which forms 10% of your credit profile. This includes mortgages, student loans, credit cards, Auto loans, etc.
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The bottom line is that, if you wish to apply for a car loan from Capital One Auto Finance, then you should focus on building your entire credit profile and forget about a minimum credit score requirement. And the reason is simple, there is no minimum credit score requirement for borrowers although you might have heard people saying there is.
So let the five factors stated above, ie.payments, amount owed, credit Mix, new credits and credit history guide you so you can have a good credit profile.