Getting an Auto Loan With OK Credit

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - March 30, 2021

If you have credit that’s OK, but not great, you may not need that much help getting approved for an auto loan – depending on what’s recorded on your credit reports, that is. But, if you’re struggling to get hold of the auto loan approval you need, we can offer some guidance.

What’s Considered OK Credit?

Lenders vary in what they define as “OK” credit, but generally, a credit score between 660 to 700 is OK. A borrower with a credit score above 700 is likely to be called a good credit borrower. In many cases, once your credit score drops below 660, you’re likely to be considered a bad credit borrower.

If your credit score floats around this area, then getting a direct auto loan from a traditional auto lender may be a little bit of hassle, but most likely isn't impossible. Your approval chances also depend on what is causing your lower credit score, though.

What’s Causing Your OK Credit Score?

If you’re a no credit borrower, it’s likely that your credit score is somewhere around the "less than perfect" or "OK" range. No credit borrowers tend to have a little bit of an easier time getting approved for an auto loan than bad credit borrowers. If this is you, then a good, stable work history, a sizable down payment, and choosing a car that fits your income can greatly increase your approval odds. Working with the right lender helps, too.

If your less than perfect credit score is because of a few missed or late payments, or something bigger, then you may struggle to get an approval, even if your credit score isn’t considered bad in the traditional sense. Borrowers with habitually poor credit histories may not meet the credit score requirements of a traditional direct lender.

If your lower credit score is the result of a recent repossession (less than a year old), then your auto loan options start to dwindle a little bit. Bankruptcy borrowers may have seen some damage to their credit scores as well – but not all hope is lost even when you have credit challenges.

Types of Financing for OK Credit

Whether your OK credit score is the result of lacking credit history, a few missed payments, or even bankruptcy, you still have options to explore in these cases.

Auto financing options to explore with OK credit:

  • Credit union – Borrowers with OK credit may have a decent shot at getting approved with their own credit union. Credit unions are direct lenders, which typically have higher credit score requirements, but credit unions can be more lenient with their requirements because they’re member-owned. If you’re a member of a credit union with accounts in good standing, then trying them may be a good first step.
  • Subprime lenders – Borrowers with credit challenges in general often seek out a subprime auto loan to get their credit back on track. These lenders often have first-time car buyer programs, and they work with many credit circumstances. If you can meet the income, work history, and other requirements of a subprime lender, you could be on your way to a car loan.
  • In-house financing – In-house auto lenders function out of buy here pay here lots, where the dealer is the lender. They may even completely skip the credit check, making them a go-to spot for many borrowers with rough or questionable credit issues. However, where there isn’t a credit check, there usually isn’t the opportunity to repair tarnished credit.

Increasing Approval Odds With OK Credit

No matter your unique credit situation, a sure-fire way to increase your auto loan approval odds is by having a down payment. Many bad credit lenders require you to have at least $1,000 or 10% of the vehicle’s selling price in either cash or trade-in equity.

Cash down lowers the amount you need to finance, lowers your interest charges, and shows the lender that you’re willing to invest in your own success. Down payments also lower the chance of the loan falling into default, too, which is a win-win for you and the lender alike.

Other things that can improve your chances of getting a loan when your credit is just OK include:

  • A solid work history of around three years, and being at your current job for at least one year.
  • A trade-in with equity that lowers the selling price of the next vehicle.
  • A cosigner that lends you their good credit score and promises to repay the loan if you become unable to.
  • A co-borrower that shares responsibility for the loan and adds more income to the car loan application.

Ready to Take the Next Step?

Having less than perfect could mean doing a lot of work to find an auto lender that’s willing to work with your unique circumstances. But you may not have to do any searching at all if you start with us at CarsDirect.

Our nationwide network of dealerships are signed up subprime lenders, and we can look for one near you with no cost or obligation. Get started on the path to your next auto loan by filling out our free auto loan request form.


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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