Can I Get a Car Loan with a Credit Score around 400?

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Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - December 19, 2019

When your FICO credit score falls around the 400 mark, you’re considered a deep subprime borrower. Deep subprime is the lowest credit tier, but you may still have car loan choices. They may not be as easy to come by as a loan in the subprime or non-prime ranges, but we can show you how to get an auto loan with a credit score of around 400.

Lenders for Low Credit Scores

When you’re dealing with bad credit – credit scores of around 600 and below – car loans are typically more challenging to qualify for than if you had good credit. Bad credit auto loans require more conditions to be met, but they’re worth it in the end, because a bad credit car loan can be a wonderful way to help improve your credit score.

Lenders that offer these loans are called subprime lenders, and they work with bad credit borrowers through special finance dealers. However, a credit score of 400 or below might be too low to qualify for an auto loan through one of these lenders. So, what are you supposed to do? You’re not out of the running for a car loan just yet!

Buy Here Pay Here Dealers Can Help

If you’re unable to get a bad credit auto loan through a subprime lender due to really bad credit, you have the option to get a loan from a buy here pay here (BHPH) dealership. These dealers are also lenders, so it can be easier to get approved for financing.

Buy here pay here dealerships are concerned with whether or not you can make your loan payments, not with your credit score. In fact, these lenders typically don’t even check your credit score. BHPH dealers check to make sure you have enough income to make the monthly payment, and that your current bills don’t require too much of your monthly income.

Even though not having your credit checked might sound like a perk if you have a low credit score, there are a few drawbacks to this type of loan. Because these dealerships aren’t relying on your credit history, they sometimes require you to make a payment every time you get paid – either weekly or every two weeks.

Your vehicle selection is limited to used cars that are on the BHPH lot at that moment in time. You may find everything from vehicles that are only a few years old to older used cars – it can vary widely.

With BHPH dealerships, you can get the vehicle you need despite your credit situation, but this type of loan may not help you improve your credit score the way a subprime loan does. Since not all BHPH dealers report your on-time payments to the credit bureaus, you’re going to want to make sure the one you’re working with does.

If not, it’s important that you work on building your credit in other ways, so you can qualify for a subprime auto loan next time.

The Bottom Line

If you have bad credit but aren’t willing to make the weekly or bi-weekly payments that may be required by BHPH dealerships, you should try to get a subprime loan. Even though it may be more difficult with a credit score around 400, you may still be able to find a lender to work with.

Since subprime lenders only work through special finance dealers, you may not know where to start your search for a car loan, but we can help. Here at CarsDirect, we work with a nationwide network of special finance dealerships that have the lenders to help people in many types of credit situations.

To get started on the path toward your next vehicle, simply fill out our no-obligation, free auto loan request form. After you do, we’ll get to work connecting you with a dealer in your area.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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