What Credit Score do You Need to Buy a Car?

Get Car Financing
Even with poor credit.

By

Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


, Contributing Writer - October 2, 2018

People with bad credit are always wondering what credit score they need to finance a car. While an exact minimum credit score to buy a car depends on too many additional factors to quantify, knowing where your credit stands before applying for an auto loan is still great advice.

Minimum Credit Score for a Car Loan

Auto lenders use your credit score to determine if you qualify for a car loan, and also to decide the other terms of your loan, including the interest rate. Car buyers with better credit receive better loan terms than those with bad credit, with everything else being equal.

While auto lenders do have a minimum credit score to buy a car, the specific number varies. It depends on many different factors, such as your overall borrowing profile and the loan programs a particular lender offers.

The information on your car loan application – along with your credit history – gives lenders a better sense of your overall qualifications as a borrower. Things like your income in relation to your monthly bills, the size of your down payment, and the amount you want to finance all play a role in the approval process.

Then, it comes down to the qualifications the lender uses. If approved, lenders place you into a lending tier, with better tiers offering more favorable terms. Where your score falls on the range – while accounting for other factors in your overall profile – determines which tier you qualify for. In turn, the tier you qualify for determines the interest rate, the loan terms you're offered, how much you're allowed to borrow, and the down payment amount you may need.

For example, a borrower with a 700 credit score may qualify for a tier that allows them to finance up to $35,000 for a term of up to 72 months, while a borrower with a 620 credit score may only qualify for a maximum loan amount of $25,000 and a maximum term of 60 months with the same lender.

Of course, every lender isn't going to have the same classifications for each tier. Lending happens on a case-by-case basis, and there's not any one-size-fits-all program in place. With all of the factors involved, it's impossible to know exactly what the lowest credit score for a car loan might be.

The Minimum Credit Score to Buy a Car

Most auto lenders use the FICO credit score when evaluating car loan applicants, which ranges from 300 to 850. Knowing your credit score before applying for a car loan is a great way to get prepared. Here's a rough breakdown of what constitutes good and bad credit according to FICO:

  • 800 and above: Excellent credit
  • 740 to 799: Very good credit
  • 670 to 739: Good credit
  • 580 to 669: Fair Credit
  • 579 and below: Bad credit

There are many different ways for you to get your credit score. You can get it directly from FICO or any of three major credit bureaus (Experian, Equifax, and TransUnion) for a small fee. As for free credit scores, many different credit card providers give their cardholders unlimited access to their FICO score, while many third-party sites and companies do the same.

However, keep in mind that some of the free scores available to you won't be your FICO score, as there are many different credit scoring models in circulation. Because most auto lenders use your FICO credit score, we'd advise that this is the score you try to get your hands on.

Financing a Car with Bad Credit

People with bad credit may think they won't be able to get an auto loan. While the best rates and terms are only available to car buyers with great credit, consumers with poor credit can still get financed – they just need to know where to go.

CarsDirect can match you with a local dealership that's signed up with subprime lenders. These lenders work specifically with borrowers with poor credit. Fill out our free and easy auto loan request form, and we'll get to work connecting you with a local dealer.

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, Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


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