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You’re in the market for a new car. You’ve done your research and you know what you want.

But there’s one thing you’re not sure about: what credit score is needed to buy a car?


The answer, unfortunately, is not as straightforward as we would like it to be. There is no one-size-fits-all answer to this question. Your credit score is just one of many factors that lenders will consider when you apply for a car loan. Other factors include your income, your employment history, and your debt-to-income ratio.

That being said, your credit score is still an important factor in the car-buying process. The higher your credit score, the lower the interest rate you’ll qualify for on your car loan. And that can make a big difference over the life of your loan.

For example, let’s say you’re looking to finance a $20,000 car loan over five years. If you have excellent credit and qualify for a 3% APR loan, your monthly payments will be around $369 and you’ll pay $2,415 in interest over the life of the loan. But if your credit isn’t as good and you can only qualify for a 5% APR loan, your monthly payments will be around $395 and you’ll pay $3,173 in interest over the life of the loan. That’s an extra $758 that you’ll be paying in interest just because of your credit score!


FICO® Scores are the credit scores most lenders use to determine your creditworthiness and how likely you are to default on your loan. The scores range from 300 to 850, and the higher your score, the better.

You’ll need a FICO® Score of at least 620 to get approved for a loan. However, this is just a general guideline. Some lenders may require a higher credit score for loan approval, and some may approve loans for borrowers with lower scores.

To improve your chances of getting approved for a loan with favorable terms, it’s a good idea to aim for a FICO® score of 750 or higher. With a score in this range, you’re likely to qualify for loans with the best interest rates and terms.

What Is Considered A “Poor” Credit Score?

A FICO® score of 580 or below is considered poor or bad credit. However, each lender has its own definition of what bad credit means. Some lenders may consider borrowers with scores of 580 or below as high-risk and not extend loans to them at all.


It’s no secret that having a good credit score can save you money and open up more opportunities. But what do you do if your credit score isn’t so great? You may still get an auto loan, but it could be harder to get and more expensive.

If you’re thinking about buying a car but have bad credit, there are several things you can do to improve your chances of getting a loan.

  • First, it’s important to remember that lenders take many factors into account when reviewing your credit report, so it’s important to focus on the factors that are within your control. For example, paying your bills on time and keeping your debt levels low will boost your credit score.
  • It may be helpful to work with a lender or credit repair specialist who has experience working with individuals in similar situations.
  • You might apply for a secured loan first, as this option carries less risk for lenders because of the collateral offered. With these tips in mind, you can take action now to improve your chances of getting the car loan you need and deserve.
  • You can opt for a larger down payment. Lenders often perceive borrowers who make larger down payments as less risky, which could help increase your chances of getting approved for an auto loan.
  • Get a co-signer. Having someone with excellent credit sign your loan application with you can help improve your odds of being approved by the lender. Just remember that if you default on the loan, it will negatively affect both your credit scores — and your relationship with that person.
  • Consider working with a special finance dealer. These dealers work with subprime lenders and specialize in helping people with bad credit buy cars.

A bad credit score can make it more complex and more expensive to get an auto loan, but it doesn’t mean you won’t be able to find financing. By saving up for a larger down payment, getting a cosigner, or working with special finance dealerships, you can give yourself a better chance at being approved for an auto loan — despite having bad credit.

Can I Buy A Car With No Credit?

If you’re looking to buy a car but don’t have any credit, you may wonder if it’s possible to get approved for a loan. The good news is that it’s possible to get a car loan with no credit. However, there are a few things you need to know before you start the process.

First, it’s important to understand that you may not get the same terms as someone with good credit. For example, you may have to put down a larger down payment or agree to a shorter loan term. But even with these slightly less favorable terms, getting a car loan with no credit is still possible.

If you’re ready to shop for a car, the next step is finding a lender that’s willing to work with you. There are plenty of options out there, so do your research and shop around for the best deal.

Once you’ve found a lender, fill out an application and provide any required documentation. From there, you’ll be able to see what kind of loan terms you qualify for. With some perseverance, getting a car loan with no credit is possible.

Remember: a credit score is just a number. It doesn’t define who you are as a person and it doesn’t dictate your ability to buy a car. We hope you enjoyed this post and good luck car shopping!

If you need help finding the best car insurance coverage for the best price, start by speaking to a SimplyIOA agent at 833.872.4467 or get an auto insurance quote online now.

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