Is 673 a Good Credit Score for a Car Loan?

Getting a car loan with a 673 credit score is possible, but you may not get the best rates or terms. Whether 673 is a good credit score for an auto loan depends on your financial situation and goals. This article will break down what a 673 credit score means, how it impacts car loan rates, and tips for getting the best auto financing.

What Does a 673 Credit Score Mean?

A 673 credit score falls in the “fair” credit range according to leading credit scoring models like FICO and VantageScore. Here’s a quick rundown of what a 673 credit score indicates:

• It’s below the “good” credit threshold, which starts at 670 or 700 depending on the model. So 673 is not an excellent score, but it’s also not poor.

• Approximately 22% of Americans have credit scores in the fair range. So a 673 is common, though still below average.

• With fair credit, you may pay higher interest rates and fees for loans and credit cards. Lenders view fair credit borrowers as riskier than those with good/excellent scores.

• On the plus side, a 673 score makes you eligible for most loans and credit products, unlike bad credit borrowers

Auto Loan Rates with a 673 Credit Score

While every lender is different, here are some general guidelines on car loan rates with a 673 credit score:

• Interest Rates Expect rates of 10-20% at most major lenders, compared to 3-7% for those with good/excellent credit. Some subprime lenders may offer lower rates.

• Down Payment: You may need 10-20% down vs. 0-5% for buyers with 700+ scores. This compensates for the higher risk.

• Loan Term: Lenders may limit term lengths to 4-5 years instead of 6-7 years. Shorter terms mean higher monthly payments.

• Fees: There may be an origination fee of 1-2% of the loan amount. Application or documentation fees are also possible.

• Co-Signer: Adding a co-signer with better credit can help you qualify for a lower rate. But the co-signer is also responsible for the loan.

Overall, a 673 credit score will make getting a competitive auto loan more challenging. But it’s still in the approved range at most lenders if you meet their other requirements (income, debt levels etc).

Tips for Getting the Best Car Loan with a 673 Credit Score

If your goal is to get the lowest rate and most affordable car loan, here are some tips with a credit score of 673:

• Shop around: Compare rates across multiple lenders including banks, credit unions and online lenders. Don’t assume the dealership will have the best rate.

• Get pre-approved: Being pre-approved strengthens your negotiating position and gives you a rate benchmark.

• Consider a co-signer: Ask a family member or friend with good credit to co-sign if it improves your rate significantly.

• Make a larger down payment: Putting down 20% or more can help you qualify for a better rate and terms.

• Highlight other positives: Emphasize your stable job, income, and past auto loan repayment history when applying.

• Improve your credit first: Building your score to the good range (670+) before applying can make a big difference in loan rates.

• Weigh longer terms: Extending the repayment term lowers the monthly payment, but also increases the total interest paid.

• Compare lease vs buy: Leasing may have lower monthly payments but you won’t own the car when done. Crunch the numbers carefully.

With some work, it’s possible to get approved for a car loan with a 673 credit score. But taking steps to improve your credit score before applying will likely result in the most savings on your auto financing.

How to Improve Your Credit Score to 673 or Higher

If your credit score is currently below 673, or you want to keep boosting it higher, here are proven ways to improve your credit:

• Review credit reports – Make sure there are no errors dragging down your scores. Dispute any inaccurate information.

• Lower credit utilization – Keep balances below 30% of your credit limits on cards and loans.

• Pay all bills on time – Payment history is usually the biggest factor in your scores.

• Don’t close old accounts – Keeping your longest aged accounts open preserves this component.

• Limit hard inquiries – Too many credit checks from applications hurt scores, especially in a short period.

• Ask for credit limit increases – Higher limits help lower your utilization for a quick boost.

• Become an authorized user – Being added to a family member or friend’s old account can help.

• Wait it out – Negative marks fall off your reports after 7 years, boosting scores.

• Add positive information – Taking out an installment loan or secured card and paying diligently can also help.

With a steady focus on building good credit habits month after month, it’s realistic to improve a fair score to good within 6-12 months. Getting to an excellent credit score of 750 or higher will likely take longer.

Is 673 a Good Credit Score for a Car Loan?

If your goal is to get the best auto loan rates, it pays to improve your credit score before applying. But even at 673, you have options for financing a car purchase if you shop around, make a sizable down payment, and meet the lender’s other requirements.

Improving your credit 100 points or more prior to your car purchase can potentially save you thousands over the loan term. So put in the effort to build your score if possible. But a 673 credit score still gives you a decent shot at getting approved on a mainstream car loan in most cases.