Good credit scores are what all banks ask for. Any applicant applying for a car loan or any other type of loan with a financial institution or a bank would have to go through a credit check.
Banks and lenders would want to know the current credit scores and the credit history of any applicant before they decide to provide a loan to anyone. But does having good credit scores really help a case?
Why do banks conduct credit checks?
In order to decide whether or not an applicant should be provided a car loan, banks would take several factors into consideration. Any lender would want to ensure that the applicant they provide a loan to would be able to repay the loan without any problem.
Credit scores of an applicant are an indicator to the financial history of the person which is one of the main reasons why so much importance is given by lenders to that single factor.
With a credit check lenders would have access to not just the credit score of an applicant but also to their financial history like any arrears or late payments in the past, CCJs, IVAs etc. All of this information will provide lenders an indication of whether or not an applicant should be given a car loan.
Do good credit scores help?
All lenders would want to provide their car loans to borrowers with good credit scores. Good credit scores indicate that the individual is financially responsible and has been regular with repayments in the past with the other obligations.
Any applicant with a good track record would be able to get a loan quite easily. Good credit scores can easily increase your chances of getting an approval for a car loan. Higher scores can also be helpful in another way. The interest rate that would be charged by the lender for your car loan would also be based on the credit scores.
Applicants with higher credit scores would be considered to be low risk applicants and for that reason they would be able to get lower interest rates on the car loan. For all of these reasons, maintaining a good track record and having good credit scores is very important for any applicant.
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If you don't have credit and want to purchase this older car with a decent interest rate I have 2 suggestions. Try to get a personal loan instead of an auto loan if you've had a relationship with a bank or credit union for a while. If not you'll probably need to get a co-signer.
It's often easier to purchase a newer vehicle and the monthly payments are usually not much higher because you can spread them out over a longer period. Many new car dealerships have great relationships with finance companies to help people with no credit. That doesn't mean you have to buy a "new" car, they always have used cars available. Make sure you get payments that are absolutely easy for you to handle, you'll be surprised how many things pop up in a month that eat away at your finances. Best of luck.
P.S. Try very hard to stay away from Buy-Here-Pay-Here dealerships, they serve a real purpose getting people in a car who have no other alternatives but are horribly expensive compared to the normal methods.