Can I get a car loan with a credit rating of 550?

By Angela Monroe - June 6, 2018

When you’re suffering from a poor credit score, obtaining a car loan is difficult, but certainly not impossible. Many Australians manage to get a bad credit car loan from special lenders despite having a poor credit score.

Some non-conforming lenders offer bad credit car loans, even for scores as low as 550. If you’re looking for a car loan with a credit rating of 550, it is possible to obtain a loan. However, you’ll need to approach the right lender to be successful. Car loan brokers can help you approach the best lenders for your needs.

Before we take a look at how you can increase your chances of getting a loan, let’s take a better look at what a 550 credit rating means.

What a 550 credit rating means

In Australia, there are four credit reporting agencies and each uses a different system to rate credit scores. Across all different credit rating systems, your credit score will be indicated as a number between 1-1200 (the Equifax system) or between 1-1000 (the Experian system).

A credit score of 550 is considered to be average for the Equifax system and poor for the Experian system.

This table will give you a better idea of what different credit scores across these systems indicate:

Credit band Equifax Experian
Excellent 833-1200 800-1000
Very Good 726-832 700-799
Good 622-725 625-699
Average/Poor 510-621 550-624
Below Average/Very Poor 0-509 0-549

 

A 550 credit rating is considered to be poor across both systems. Such a poor credit score can hamper your chances of obtaining credit. However, you still do have some options on hand.

What credit options do I have a 550 credit rating?

You’ll be glad to know that it is possible to obtain a car loan with a credit rating of 550. However, you should be prepared to pay higher interest rates on your loan. You can expect to pay interest rates of 14 per cent or higher at a 550 credit rating.

A little maths will tell you that you’ll need to pay a lot regarding interest if you secure a loan at a credit rating of 550. One way around this situation is to improve your credit score before you approach a lender.

If you cannot wait to improve your credit rating, you can still access certain credit options with a credit score of 550. Several lenders offer bad credit car loans in Australia. However, interest rates will vary from one lender to another.

To get the best rates on a car loan with a credit rating of 550, you need the help of a professional consultant. Professional consultants will help you understand what credit options you have available, and they will also help you approach genuine lenders.

How to improve a credit rating of 550

A credit rating of 550 will severely impact your financial life by limiting your credit options significantly. To increase your credit options, you should take all necessary measures to improve your credit rating.

There are several things you can do to improve your credit rating. Avoiding late payments, paying down revolving balances, removing collection accounts and raising credit limits are some ways to improve your credit score.

Also, don’t pay open collections, don’t contact collection agencies, don’t seek out too many loans and don’t discuss collection items with collection agencies as doing any of these will affect your credit score negatively.

In addition to all of these, you must always maintain a good financial record to improve your credit rating. To maintain a good financial record, you must demonstrate a history of savings. Make sure that you save some of your income every month. Also, maintain a responsible credit behaviour. While these will not directly impact your credit rating, they will show lenders that you are now financially responsible despite your poor credit score.

Following all these steps will take persistence and good financial management. If all this sounds too much to handle, you should seek the advice of a professional mortgage consultant. Professional consultants can offer you expert guidance on how to improve your credit rating.

Loans for People with Bad Credit is your best choice when it comes to bad credit car loans in Australia. We specialise in helping people suffering from bad credit access the best credit options available to them.

Our team of expert brokers can help you make the most of a poor credit score. Even at a credit rating as low as 550, we can help you access car loan options. We have access to several specialised lenders in the market, many of whom will be willing to offer you a car loan.

Get expert advice for your car loan

Getting a car loan with a credit rating of 550 is certainly not easy. To improve your chances of getting a car loan, you should always seek the advice of expert consultants such as Loans for People with Bad Credit.

We’ve helped many people get access to credit options at poor credit ratings, and we can help you too!

To find out more about how our expert brokers can help you get a car loan with a 550 credit rating, get in touch with us today!

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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