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What’s the Minimum Credit Score Needed for a Car Loan?

When shopping for a new or used vehicle, most consumers will finance their purchases. Only about 1 in 10 people have enough money on hand to pay cash for a new vehicle, thus automotive financing is available for both new and used vehicle shoppers. Your credit score can make a significant difference in securing a car loan or not. We will take a look at the minimum credit score required for securing such a loan, but that answer may surprise you.

Credit Score Basics

Credit scores represent a three-digit number based on how well you manage your credit. Every consumer has one and your FICO Score can fall between 300 and 850.

FICO isn’t the only score tabulated, but it is used by the majority of the major lenders in the United States. Your score is based on your credit history and is used to determine how much money you can borrow and at what interest rate.

Your credit score is based on information assembled by the three consumer credit reporting bureaus: Equifax, Experian and Trans Union. Information in those reports should accurately reflect your credit history, but mistakes do happen. Those mistakes as well as outdated information can lower your credit score.

[Read: Buying a Car with Bad Credit]

Your Credit Score

FICO may not be the only credit score, but it is most likely the one used by your lender. While credit reports can be obtained for free, you must pay a nominal fee to retrieve your credit score.

What is considered excellent credit has everything to do with the car loan you are seeking. Advertised rates from manufacturers and lenders are for people with the best credit. Thus, if your score comes in below the best rates, you may not qualify for the lowest interest rate loans as advertised.

[Read: How to Find the Best Used Car Deals]

Excellent Credit Defined

Defining an “excellent” credit score may be harder to pin down. It all depends on your lender’s criteria and the type of loan you are seeking. That point of comparison is not static — it adjusts as market conditions change.

For instance, a mortgage lender may consider a score of 780 to be excellent and a score of 720 as “very good.” However, when it comes to auto loans, that 720 score may be sufficient to enable you to receive the best rate for your auto loan since each lender sets their own criteria.

Experian, one of the three consumer credit reporting agencies, says that most scores fall between 600 and 750. Furthermore, a score above 700 “usually reflects good credit management.” However, that “good” score does not mean your credit is excellent.

[Guide: Best Used Car Deals]

Minimum Credit Score

We still have not answered the question at hand — what’s the minimum credit score needed for a car loan? That answer depends on the individual lender. Thus, the minimum score might be 680 for one lender and 640 for another lender. Consequently, you need to approach borrowing in the same way that lenders understand it — as an individual consumer.

What you should know is that there are lenders who will provide car loans to people with lower credit. Typically known as “subprime loans,” these loans are not underwritten by every lender and are usually offered by certain banks and financing companies.

Interest.com notes that subprime loans cover people with credit scores between 501 and 600. However, these borrowers are also charged interest rates that are 3 to 5 times higher than prime borrowers. Thus, if a lender is touting a 2 percent interest rate on a car loan, you should know that this rate applies only to people with the best credit. If you have a subprime credit score, your loan rate may fall between 6 and 10 percent, perhaps more.

[Read: Understanding Used Car Prices]

The Bottom Line

Clearly, there are lenders for nearly every type of consumer. That means you may be able to find a car loan no matter how low your credit score is. But it will also come with a price — a higher interest rate. Moreover, your lender may restrict the amount of money you can borrow to help keep your monthly payments down.

So, how can you obtain a favorable car loan? By shopping around. And if your score is low you need to be diligent here, otherwise your rate may come in higher or you may be turned down for the loan.

It is harder to secure a new car loan if your credit score is low. However, that same lender may approve your request for a used vehicle, including a certified pre-owned (CPO) vehicle from a dealer. You might also check with your bank or credit union to arrange financing on your own. Indeed, your bank should be familiar with you and that personal knowledge may cut you some slack if your credit score is low. In any case, borrow what you can afford to repay even if that means settling for a different make or model.

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60 thoughts on “What’s the Minimum Credit Score Needed for a Car Loan?”

  1. That’s good to know the range of a credit score. I had no idea that you had to have at least a 600 to be considered with good credit. I’ve been trying to shop around to buy a car, but I know my credit is not that good because I don’t have a lot of credit build up. I’ll have to try FICO to see what it says. What’s the best way to build your credit the fastest?

    1. Start out with a secured credit card for the maximum amount you can afford. Secured means you give them the money to cover the card. Consider one where you can increase it by increasing your deposit. One that will consider increases on their own like Capital One. Use it no more than 10% of the amount. Perhaps just gas or grocery items. You’ll find that this alone within 6 months will bump your score a good amount. Put aside money where you can and increase your own limit by increasing the hold amount. This can also result in a minor bump. Read the fine print carefully, some do not offer change from secured to unsecured. Some pay interest, others do not. Also, there is an annual fee, apply for one that is small as possible.

    2. No that wasn’t what the article said. A good score is no where near 600. It is at least a 700. Credit scores are based on credit history…which is also in the article. No way to build fast history.

      1. When they say you will build credit over time, when does the changes start taking place in my credit score and by how many points in every report?

        1. I start rebuilding my credit in March 2016, which was 542 and now it is 618.. I did get a secured credit card and starting paying on my student loan. I also have my payments come directly out of my checking account.. My payments is always made when they r due..

      2. Credit scores aren’t just based on history. I went from 560 to 720 on my trans union report in just 7 months. Got a credit card used under 30 percent of the balance. Then got a 5000 dollar loan off my own money and it basically pays off itself, also paid some old debits off. Scored jumped quick quick quick.

          1. I had a 550 with bad credit was in debt with collectors I owed 6500 settled with 3500 got 2 credit cards and went to a 620 in 30 days bought my home and have never been turned down yet it’s a beautiful thing and won’t go back

    3. Get one of your family members mom dad brother or even a friend to put you on as a Authorized user on there credit card for 30 days or more tell them you don’t want the card but their credit history that will come from the card and pick one that’s been open the longest as well as no miss payment and your credit will rise like no other

    1. Do NOT buy a Nissan. Their transmissions FAIL and they do not replace them unless you’ve gone to them for all your servicing and within the extended warranty time. Ask ANY MECHANIC about Nissan’s CVT transmissions. They’ll tell you they are pieces of crap.

      I bought a used Rogue two years ago and was not told about the PREVALENT CVT problem, NOR was I told about their extended 120k warranty on it. Well, my transmission is going out at 129k, and Nissan basically said TOUGH CRAP. I will NEVER, EVER again buy a Nissan.

      1. So true! Just had to replace the transmission in my 2010 altima and it has 116000 miles. Super lucky it went out when it did! Had it fixed with no issues from the dealership. However, I’m trading it in as soon as I can. The generation my car falls in has crap transmissions which is why nissan extended the factory warranty on them to 6 years or 120k. I hate it. Great car otherwise.

      2. I have a 2011 Nissan Maxima with 58,000 miles on it. My CVT transmission went out on 2/17/17 and luckily it was covered under an extended warranty, as I bought it used and the time was out on the original warranty. But then they tried telling me they would only cover a used transmission and that I could pay the $1100 difference if I wanted a new one. After some not so nice words and threats on my part, they called 2 days later and said they would be putting a new transmission in. It took 3 weeks of phone calls and fighting before I finally got my car back. I will never by a Nissan again!!!!!!

      3. I have a 2010 Nissan Sentra with 140,000 miles and my transmission is running like new. Tough luck for you though

    2. Nissans are okay vehicles. Performance wise they are great. I had a Nisssan Maxima and it was a beast. It took me everywhere and with tune ups and regular maintenance it was great. . . up until it reached about 170K miles! Everything started coming down after that. There was SOOOO MUCH RUST on this thing I had to let it go. I bought another Nissan. This time an Altima. I live in Minnesota and it was also a beast. In below 30 degrees windchill weather – it never let me down. Started right up and got going! Again at 150K problems after problems. Head gasket leaks, noisy loud engine. RUST ISSUE FROM THE BOTTOM UP. They are an F when it comes to RUST. They rust too easily no matter how much upkeep you do on it. Not worth it. No!

    1. I have a 2008 Nissan Altima and my baby has 166K miles. I haven’t done any major work on it; just regular scheduled maintenance.

    2. yeah thats definitely not true.. I had an Infiniti G35 (same engine as a Nissan Z) that i just wrecked and it had over 110k miles on it and all i ever did was oil changes.. one battery… one brake job… and a set of tires or two. my parents own 3 others that have had ZERO problems. your logical is idiotic.

      1. 2007 Nissan Titan with 160k miles, 2 battery changes and 2 set of tires. Drives smooth when needed, pulls trailers when needed and races mustangs at the light with all that 5.6liter power. never had an issues. ever

        1. Mine hit just over 400k before her motor shot I had 93 accord coupe, they’re awesome cars if you take care of them

    3. Most manufacturers have plastic in some fashion in many components. I’ve seen many Nissan/Toyotas with the highest mileage on them, indicating they last. I own a ford, my plastic is in my transmission. Fixed and its still on the road 8 years later.

    4. We have a 2006 Nissan Xterra with 188000k miles and it runs great with NO problems in the last 10 years! Looking for another Nissan SUV now ?

      1. 1995 pathfinder with 334,000 miles! Motors has never been opened and AC has never needed charging! Only changed radiator, two starters, two batteries, tie rods and center links! Nissans rule!

        1. I have a Suzuki XL7 with 680,000 miles.. Still going strong and with only one oil change, a spark plug and a set of new floor mats.

  2. I am looking to get an auto loan so I can get a new car for my wife since I work a lot. My credit score isn’t great but isn’t bad either. That is good to know that it all depends on the lender. I actually have a higher credit score the 680 so that is good to know! Thanks for the help!

  3. In this consumer-based world, it makes complete sense to shop around for a competitive rate on a car loan. My question is how do you do that while avoiding multiple hard credit enquiries, which can damage your credit score? Any advice? My credit score seems to update weekly (on Thursdays), so does that mean I should try and choose a lender within a week? And just “suck it up” when it comes to the hard enquiries updating to my score?

  4. Actually I just bought June 15 a 2012 Nissan Murano 39k.Love this SUV!! I had more problems with poor handling of my paperwork! Finance rep told me I had a 811 credit score when I said 800. I know great problem to have. Nissan sent my info to wrong address which I think is address that showed up on credit reports. Dealership lost title to my trade in! Screwed up new title and I still love my Murano which I plan to pay off soon. Daughter needs SUV maybe Nissan but NOT that dealership! !!

  5. I have a credit score of about 550 does anyone know if kia would finance u for a new car im asking because a friend of mine had the same score and is riding around in a 2016 new kia

    1. Don’t buy kia had one problem with wiring , headlights and now motor locked up. Kia has not honered any warrenties. When they know these problems are common with kia. BEWARE

      1. check the lemon law..if a company does not fix the problem after 3 tries then it is considered a lemon and they have to replace the car or your money.

  6. i was rejected for a used car loan because of my past due late payments in the past. they said my credit score from Experian was 643 but I have credit karma,I checked my scores with Experion It was 690 and the other Credit Bureau said it was 667. what should I do

    1. Unfortunately there are ALOT of different scoring models out there. Credit Karma uses the 3.0 model which has a higher end range. There is nothing to actually “do”. You should still be able to get a loan, just not with the most favorable rates (13 – 16%)

  7. those looking to finance should use a credit union, they have and will usually have the best rates. also, when looking at credit scores, contact the bureaus not these 3rd party companies.

    1. The credit union does not always provide the best APR. I got a 0% from my dealership’s financing arm and that rate was better than what my bank offered and what the credit union would have offered. If your credit is good, your options are vast.

  8. Shopping for cars I noticed you might want to stay away from Fisher-Price cars. They use a ton of plastic in it and I noticed it doesn’t have a motor. Not a happy camper right now

  9. I checked a different site and my cedit said 675 but I checked here and it said 518-508 why the big differeince

  10. I got a pre-approved loan from Capital One for up to $35,000 (via email) for this Lexus dealership event this week. I have a credit score of 562. What are the odds of me qualifying to get a car and the loan working out? Also any recommendations on a good 4 door? Used, under 20k, toyota, honda, hyundai, or nissan? 1st car. Need great gas mileage. Also plan on using to drive Lyft/Uber.

    1. Put enough money down and you will get a loan. Though interest will be on the higher side. Have you ever had an Auto Loan? If you have, and NEVER had a late payment, or repo etc and payed off an auto loan, this helps more than credit rating. Also need a decent income but this all differs too.

      Toyota Camry, 4 cyl. Best Bet!

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