If you’re planning to finance a car, your credit score will play a big role in what kind of loan you qualify for—and how much you’ll pay over time. But what credit score is actually needed to buy a car? And what if your score isn’t quite where it needs to be?
In this post, we’ll break down the credit score ranges used by auto lenders, how they affect your loan options, and the steps you can take if your score is too low.
What Credit Score Do You Need to Buy a Car?
While there’s no one-size-fits-all answer, most traditional auto lenders look for a credit score of at least 660 to qualify for a standard car loan with favorable terms.
Here’s a general breakdown:
| Credit Score Range | Rating | Loan Impact |
|---|---|---|
| 781–850 | Excellent | Lowest interest rates, best terms |
| 661–780 | Good | Competitive interest rates |
| 601–660 | Fair/Subprime | Higher rates, limited options |
| 501–600 | Poor/Deep Subprime | Very high interest, larger down payment |
| 300–500 | Very Poor | May need a co-signer or special financing |
Important: Some lenders specialize in bad credit auto loans, so even if your score is below 600, you still have options.
How Your Credit Score Affects Auto Loans
Your credit score determines:
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Whether you’re approved
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The interest rate (APR)
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How much you can borrow
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Whether a co-signer or down payment is required
Example:
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With a credit score of 750, you may qualify for a 5% APR.
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With a score of 550, your APR could jump to 15–20%, adding thousands in interest over the life of the loan.
What to Do If Your Credit Score Is Too Low to Buy a Car
Don’t worry—having a low credit score doesn’t mean you’re stuck without a vehicle. Here are smart steps to improve your approval chances or make your loan more affordable.
1. Check Your Credit Report for Errors
Mistakes on your credit report can drag your score down unnecessarily. Get a free report from AnnualCreditReport.com and dispute any inaccuracies.
2. Pay Down Existing Debt
Reducing your credit utilization can raise your score fairly quickly—especially if you’re using over 30% of your available credit.
3. Save for a Bigger Down Payment
Putting more money down reduces the lender’s risk and increases your chances of approval. It can also lower your monthly payments and total interest.
4. Get Pre-Approved by a Lender
Pre-approval helps you understand your financing options before stepping onto a car lot. Look for lenders who specialize in bad credit auto loans.
5. Consider a Co-Signer
A co-signer with strong credit can help you qualify for a better rate. Just make sure both parties understand the shared responsibility.
6. Start with a Budget-Friendly Used Car
If you need reliable transportation fast, aim for an affordable used car with good maintenance records. Avoid stretching your budget for unnecessary features.
Can You Get a Car Loan with No Credit or Bad Credit?
Yes. Many lenders offer subprime auto loans or buy here, pay here financing options. These come with higher interest rates, but they can help you get a car and rebuild your credit if you make on-time payments.
Be cautious of:
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Hidden fees
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Extended loan terms with high interest
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Vehicles sold well above market value
How to Build Credit for a Better Auto Loan in the Future
If you’re not in a rush, spend a few months improving your credit before applying. Here’s how:
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Make on-time payments on all accounts
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Keep credit card balances low
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Avoid applying for new credit unless necessary
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Consider a secured credit card or credit-builder loan
