Bank of America doesn’t publish a minimum credit rating for auto loans, making it difficult to know where you stand before applying. The excellent news: You can pre-qualify online without impacting your credit rating, and the bank’s published rates of interest suggest it primarily targets borrowers with fair to excellent credit.
Here’s what to anticipate and the way to put yourself in one of the best position before you apply.
Minimum credit rating for a Bank of America auto loan
Bank of America doesn’t disclose a tough minimum on its website. Based on industry reports, the bank tends to approve borrowers within the 620 and better range, with probably the most competitive rates reserved for borrowers scoring 670 or higher. Applicants with lower scores should qualify, but typically with higher rates or a bigger down payment.
Beyond the rating itself, Bank of America reviews your income, existing debts, employment, and payment history to choose whether you may be approved and at what rate.
One thing you must know: Bank of America customers who qualify for Preferred Rewards can receive an rate of interest discount of as much as 0.50% off the regular APR. If you already bank with BofA or Merrill, that is a big savings over the lifetime of the loan.
Prequalify yourself before applying
Bank of America allows existing customers to pre-qualify online in minutes without impacting their credit rating. Based on a credit check, you might be shown the estimated loan amount, term and monthly payment.
Prequalification is not a guarantee of approval, but it surely gives you a sensible picture of what you’ll be able to borrow before you go to a dealer or submit a full application. If you do not have a BofA login, you’ll have to use directly, which is able to end in a tough credit pull.
This will strengthen your application
If you are near approval or desire a higher rate, some things move the needle greater than others:
- Lower your debt-to-income ratio. Bank of America closely examines how much of your monthly income is already going toward debt. Paying off your bank card balance before applying may also help in two ways: It reduces your DTI and increases your credit rating through lower utilization.
- Keep credit utilization below 30%. Bank of America removes your credit during underwriting, so a high balance on any card can lower your rating at precisely the improper moment.
- Pause recent loan applications. Multiple hard inquiries within the weeks before you apply can lower your rating and lift questions on why you are suddenly in search of loans. Wait not less than 30 to 60 days before applying for brand spanking new cards or loans.
- Have your income documents ready. Pay stubs, W-2s, or tax returns in the event you are self-employed. If you are willing to confirm income quickly, it could possibly speed up the method and help with borderline approvals.
What to do in case your credit rating is holding you back?
If your credit rating is below 620, applying now will likely mean either a rejection or an rate of interest so high you may regret taking out the loan. Just a few months of focused work could make an actual difference:
- Pay off revolving balances first because usage changes are visible most quickly in your credit report
- Make every payment on time as payment history has the most important impact in your rating
- Retrieve your credit reports from all three bureaus and dispute any inaccurate negative information
- Avoid closing old accounts because the length of credit history is very important
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Before you apply: A brief checklist
- Check your credit rating and get all three reports
- Dispute any errors and wait for them to be resolved
- Pay down bank card balances to cut back utilization below 30%.
- Collect current pay stubs and tax returns
- Pre-qualify with Bank of America (existing customers) or compare rates of interest from not less than two other lenders
- Consider the Preferred Rewards discount in the event you qualify
Bank of America is a solid option in case your credit is in good standing, especially in the event you already bank there. But don’t assume they’re offering one of the best price simply because you are a customer. Pre-qualify, compare and apply when your financial profile is as strong as possible.
