What Credit Score Do You Need to Buy a Car? (2024)

If you’re planning to buy a new car, you’ll most likely need an auto loan to help pay for it. With the average cost of a new vehicle exceeding $47,000 today, the great majority of buyers in the United States do.

Whether you apply for a loan through the dealership or at a bank, the lender will run a credit check on you as part of the process. Here’s what credit score you’ll need to be approved for a car loan—and what you can do if your credit is less than perfect.

Key Takeaways

  • Your credit score is a major factor in whether you’ll be approved for a car loan.
  • Some lenders use specialized credit scores, such as a FICO Auto Score.
  • In general, you’ll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
  • If you have poorer credit, you can still get a loan, but you will probably have to pay more for it or else find a co-signer.

What Credit Scores Do Auto Lenders Use?

You don’t have just one credit score, but several of them. The scoring models use the same basic information from your credit reports but weigh certain factors differently. The two major scoring models are:

  • FICO is the best-known and most widely used scoring company. FICO Scores range from 300 to 850.
  • VantageScore is a newer competitor to FICO. Though earlier versions of the VantageScore ranged from 501 to 990, the latest VantageScore goes from 300 to 850, the same as FICO does.

The major scoring models can also provide more specialized scores for particular purposes. For example, FICO offers the FICO Auto Score, an industry-specific credit score intended for auto lenders. The FICO Auto Score uses a different weighting system from other FICO Scores, with credit utilization having a bigger impact and isolated late payments—such as a one-off mistake—having a lesser one. To further complicate matters, there are multiple versions of the FICO Auto Score.

Many car dealerships rely on a FICO Auto Score, but not all do. If you’re not sure and are curious, ask your lender which scores they check before consenting to a credit check.

What Is the Minimum Score Needed to Buy a Car?

When lenders review your auto loan application, they look at your income and credit score. Lenders divide customers into categories based on their scores, such as:

  • Super prime: 781 to 850
  • Prime: 661 to 780
  • Non-prime: 601 to 660
  • Subprime: 501 to 600
  • Deep subprime: 300 to 500

In general, lenders look for borrowers in the prime range or better, so you will need a score of 661 or higher to qualify for most conventional car loans.

What Credit Score Do You Need to Buy a Car? (1)

How to Buy a Car with a Poor Credit Score

If your score is below the prime range, you may still be able to get an auto loan—but it could be harder to obtain and more expensive. Here are three options for financing a car if you have fair or poor credit:

1. Be willing to pay a higher interest rate

If you have poor credit, lenders see you as a riskier applicant. You may be able to get a car loan, but you’ll likely pay a much higher interest rate than someone with good or excellent credit will.

For example, the average interest rate for prime borrowers purchasing new cars was 4.03% in the second quarter (Q2) of 2022. For non-prime borrowers, the rate was 6.57%, while for deep subprime borrowers, it was 12.84%.

That higher rate can add substantially to your total loan cost. For example, if you financed $37,000 with a four-year loan at 4.03% interest, you would have an $836 monthly payment and would pay $3,124 in total interest.

But if you financed that same amount and only qualified for a four-year loan at 12.84% interest, your payment would jump to $990 per month. And you would pay $10,505 in total interest—a difference of $7,381.

The Better Your Credit Score, the Lower Your Interest Rate
Prime BorrowerNon-prime BorrowerDeep Subprime Borrower
Loan Amount$37,000$37,000$37,000
Loan Term48 months48 months48 months
Interest Rate4.03%6.57%12.84%
Monthly Payment$836$879$990
Total Interest$3,124$5,175$10,505
Total Repaid$40,124$42,175$47,505

2. Go to a dealer that specializes in buyers with poor credit

If you cannot qualify for a loan at a traditional dealership, you may be able to get financing from one that specializes in buyers with poor credit. Typically advertised as “buy here, pay here” dealerships, they offer in-house financing for used vehicles.

However, these dealers tend to charge very high interest rates to offset the risk of lending to borrowers with lower scores.

3. Apply for a loan with a co-signer

If your score is in the non-prime to deep subprime range, you might consider applying for a car loan with a co-signer. A co-signer is someone, such as a family member, who is willing to apply for a loan with you and, ideally, has good to excellent credit. A co-signer shares responsibility for the loan, reducing the lender’s risk. You’re more likely to qualify for a loan and get a lower interest rate than if you applied on your own.However, if you’re unable to make the loan payments, your co-signer will be stuck with the bill.

Tip

If you shop for a loan before you shop for a car, you’ll have a better idea of how much you can afford to spend.

If I use a co-signer, will I get the same rate that they would alone?

When you apply for a loan using a co-signer, the lender considers both parties’ credit scores. So, unfortunately, you won’t get the same rate as they would if they applied alone. However, you are likely to be approved and receive a more favorable interest rate.

Can I buy a car with no credit?

It’s difficult, but possible. Lenders look at people with no credit the same way they look at people with bad credit. Typically, you will need a co-signer, or you may have to buy from a dealership that offers in-house financing.

Are interest rates the same on new vs. used cars?

Typically, pre-owned vehicle loans have higher interest rates than new vehicles. In Q2 2022, the average interest rate for a new car loan was 4.33%, while used cars averaged 8.62%.

The Bottom Line

Whether you’re looking for a new car or a used one, your credit score plays a big role in your financing options, so it’s worth knowing where you stand. You can get your credit score for free from some credit card companies and online sources.

Before heading to the dealership, it’s also a good idea to obtain auto loan quotes from one or more banks and credit unions. That can help you find the best loan deal and give you some extra leverage in bargaining with the dealer. It could also help you decide how much you can afford to spend on a car.

What Credit Score Do You Need to Buy a Car? (2024)

FAQs

What Credit Score Do You Need to Buy a Car? ›

Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.

What is an acceptable credit score to buy a car? ›

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

Can I get a car with a 600 credit score? ›

This means that the higher your credit score, the more favorable your interest rate and terms will be. In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender.

Can you get a car loan with a 500 credit score? ›

It's possible to get a car loan with a credit score of 500, but it'll cost you. People with credit scores of 500 or lower received an average rate of 14.08% for new-car loans and 21.32% for used-car loans in the first quarter of 2023, according to the Experian State of the Automotive Finance Market report.

Can I get a car with a 580 credit score? ›

With a bad credit score, you'll likely be offered some of the highest advertised rates. According to data from Experian, borrowers in the subprime category (a FICO score between 501 and 600) can expect an average rate of 12.28 percent for new cars and 18.89 percent for used cars.

What credit score do I need to buy a $20000 car? ›

There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.

How much downpayment should I put on a car? ›

In general, you should strive to make a down payment of at least 20% of a new car's purchase price. For used cars, try for at least 10% down. If you can't afford the recommended amount, put down as much as you can without draining your savings or emergency funds.

What credit score is needed for a 30000 car? ›

There is no set minimum FICO® Score to get a car loan. However, a good score at 720 or better will get you the best rate. Consider spending some time improving your credit score before shopping for your next car. Even moving up a few points can make a big difference if you have a low score.

Can I get a $40,000 car with a 600 credit score? ›

It's essential to be knowledgeable about how your auto loan process will be different than someone with a higher score. You might not have the same options, but you can still get an auto loan with a 600 credit score.

Can I get a 30k car with a 650 credit score? ›

If your credit score is above 620, you are likely to get a car loan with favorable terms. Most loans you can get with a 650 credit score require a down payment and come with terms of 48 months or longer. You can expect average interest rates because 650 is a middle-of-the-road credit score.

What is the easiest car company to get financing? ›

The best car loans for bad credit
  • Best for shopping around: myAutoloan.
  • Best for buying a car online: Carvana.
  • Best from a big bank: Capital One Auto Finance.
  • Best for used vehicle selection: CarMax Auto Finance.
  • Best for refinancing: Autopay.

What is a bad APR for a car? ›

Average car loan interest rates by credit score
Credit scoreAverage APR, new carAverage APR, used car
Superprime: 781-850.5.64%.7.66%.
Prime: 661-780.7.01%.9.73%.
Nonprime: 601-660.9.60%.14.12%.
Subprime: 501-600.12.28%.18.89%.
2 more rows
6 days ago

Which FICO score do auto lenders use? ›

What credit score do auto lenders look at? The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage.

How long does it take to get from a 580 credit score to a 700? ›

How long does it take for your credit score to go up?
EventAverage credit score recovery time
Missed/defaulted payment18 months
Late mortgage payment (30 to 90 days)9 months
Closing credit card account3 months
Maxed credit card account3 months
3 more rows
Jul 27, 2023

How fast will a car loan raise my credit score? ›

How fast will a car loan raise my credit score? There's no set time frame for how long it takes a car loan to improve your credit score. After buying a car, you can expect to see your score improve after making monthly payments on time and paying down your loan balance.

Does Carvana approve anyone? ›

Yes. As long as you are 18 years or older†, make at least $5,100 per year, and have no active bankruptcies, you can finance your purchase through Carvana. To get started, you can fill out the financing application here. Don't worry, filling out the application will not impact your credit!

Can I get any car with a 700 credit score? ›

The “prime range” runs from 661 through 780. If your credit score is anywhere between 700 to 709, you are in the middle of this segment, and you can get competitive rates to finance your vehicle. However, these depend on your shopping habits, income, and debt-to-income ratio.

Can I get a good car with 700 credit score? ›

As you can see, a 700 credit score puts you in the “good” or “prime” category for financing, making 700 a good credit score to buy a car. While it's always a good idea to get your credit score in its best possible shape before buying a car, if you're already around the 700 range you will be good to go.

Is 750 a good credit score to buy a car? ›

A 750 credit score is often considered very good — or even excellent. A very good or excellent credit score can mean you're more likely to be approved for good offers and rates when it comes to mortgages, auto loans and credit cards with rewards and other perks.

Is a 630 credit score good enough to get a car? ›

Can I get an auto loan with an 630 credit score? The short answer is yes, but you're likely to get a significantly higher-than-average interest rate. To put it into perspective, as of November 2022, the typical borrower with prime credit (720 or higher FICO score) got an APR of 5.34% on a 60-month new auto loan.

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