Lenders determine whether you'll qualify for a loan, and what rate you'll pay if you do, based on your credit score. Many auto lenders rank consumers as Tier 1, Tier 2 or Tier 3, with different interest rates available at each level. While different companies have different standards, you usually need a credit score in the 700s to be considered Tier 1.
Tier 1 Standards
The specific starting point for Tier 1 credit varies between lenders. Some have a Tier 1 score that begins in the 700 to 739 range, and a Tier 0 for those over 740. If your credit falls slightly below the Tier 1 threshold, you'll be considered Tier 2.
Status Brings Benefits
Tier 1 status provides several benefits. You'll have an easier time being approved for credit, and you'll get to borrow at a lower rate. This can save you hundreds or thousands of dollars over the life of the loan. However, if you wait until you're at the dealership to get financing, the dealer might still try and stick you with a higher interest rate than your credit score would ordinarily receive. Apply for an auto loan before picking a dealer and you'll have a better chance of getting the rate you deserve.