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A higher credit score might help you qualify for more auto loan offers, including options with high loan limits, low interest rates or even 0% financing offers. But you can generally get a car loan even if you have a low credit score, or even no credit score.
What Is the Minimum Credit Score for a Car Loan?
There's no specific minimum credit score for a car loan. Banks, credit unions, online lenders, dealerships and auto finance companies (including the lenders associated with car manufacturers) can choose their own minimum credit score requirement for borrowers.
Some lenders might have a specific cutoff point. However, a lender's minimum credit score could also depend on other factors, such as how much you're borrowing and the size of your down payment.
Lenders may also specialize in certain types of borrowers. Some might prefer to work with borrowers who have good to excellent credit. Others focus on subprime borrowers—another name for borrowers who have low credit scores.
Auto lenders can also choose from different types of credit scores, including VantageScore® credit scores, base FICO Scores and industry-specific auto FICO Scores. Although most credit scores use a similar 300 to 850 range, the lender's minimum credit score might depend on the type of score.
Learn more >> What Are the Different Credit Score Ranges?
How Your Credit Score Affects Your Car Loan
Your credit score can affect your options and offers when you're trying to get an auto loan, including your:
- Loan limit: Higher credit scores might help you qualify for higher loan limits.
- Down payment: A larger down payment decreases your loan-to-value (LTV) ratio, making the loan less risky for lenders. You might need a higher down payment if you have a low credit score.
- Interest rate: Higher credit scores can help you qualify for a lower interest rate. But even if you have excellent credit, it's important to shop around because lenders may offer you different rates and terms.
- Promotional rate: You might get a low or 0% promotional rate from a dealership's financing department if you buy a specific vehicle. But you generally need good to excellent credit and a high income to qualify.
- Fees: Lenders might charge borrowers with low credit scores additional fees.
All of these factors can affect which vehicle you can afford to buy, how much your monthly payment will be and how much interest you pay overall. For example, Experian's State of the Automotive Finance Market report for the third quarter (Q3) of 2024 has the average terms for new car loans based on borrowers' VantageScore 4.0 credit scores:
| Average Terms for a New Car Loan | ||||
|---|---|---|---|---|
| Credit Score Range | Loan Amount | Term Length | APR | Monthly Payment |
| Super prime (781 - 850) | $39,369 | 64 months | 5.08% | $723 |
| Prime (661 - 780) | $43,138 | 71 months | 6.70% | $744 |
| Near prime (601 - 660) | $42,765 | 74 months | 9.73% | $767 |
| Subprime (501 - 600) | $38,400 | 74 months | 13.00% | $750 |
| Deep subprime (300 - 500) | $34,608 | 73 months | 15.43% | $724 |
Source: Experian data as of Q3 2024; VantageScore 4.0 credit scores used
Can I Buy a Car With Bad Credit?
You can get a car loan with bad credit, but you may have fewer options and end up paying more interest and fees than someone with a higher credit score. Consider whether buying a car right now makes sense or if getting a smaller loan to buy a used car might be a better option.
If you need to buy a car quickly, here are a few steps you can take to prepare and potentially improve your options:
- Check your credit. Although you likely won't know which credit score the lender will use, you can still check one of your credit scores and review your credit report. You might find that there are ways to quickly improve your credit scores before applying.
- Get prequalified or preapproved. Some auto lenders offer online prequalifications or preapprovals, which can show you estimated loan offers with a soft credit inquiry—the type that doesn't affect your credit scores. Try to get offers from several types of lenders so you can compare terms.
- Increase your down payment. A larger down payment might help you qualify for a lower interest rate. Even if it doesn't, borrowing less money will lead to paying less interest.
- Ask someone to cosign. You could see if a close friend or family member who has good credit is willing to cosign the loan. It could help you qualify and get a better offer, but they'll also be legally liable for the debt and the loan can affect their credit.
Buyers with very low or no credit might head to buy here, pay here (BHPH) dealers, which finance their own sales and generally have more lax eligibility requirements. Although these may be an option, the loans tend to be very expensive. Try several banks, credit unions, online lenders and non-BHPH dealers first to see what they can offer.
Learn more >> How to Get a Car Loan
How to Improve Your Credit Score Before Applying for a Car Loan
If you can put off the purchase for at least a few months, you might be able to improve your credit and qualify for a better car loan. Even if you can't wait, you could try to refinance with a lower-rate car loan after your credit score increases.
The exact steps you'll want to take could depend on what's affecting your credit today, but here are a few tips that will benefit many people.
- Pay your bills on time. The payment history in your credit report is one of the most significant scoring factors, and even one late payment can hurt your scores. Try to bring all your accounts current and make at least the minimum payments on your bills.
- Decrease credit card balances. Paying down credit card balances can lower your credit utilization rate—a comparison of your cards' balances and credit limits. A lower utilization rate is best for your credit, and reducing credit utilization is one of the few things you can do that might quickly increase your credit scores.
- Keep your credit cards open. Closing credit cards might make sense if the card has an annual fee or if you tend to overspend and accrue interest. Otherwise, consider keeping the cards open. Closing a card could decrease your overall available credit, which increases your credit utilization rate and might hurt your scores.
- Address collection accounts. If you've had bills sent to collections, settling or paying off the collection accounts might improve some of your credit scores.
- Get added as an authorized user. You might be able to improve your scores by asking a friend or family member to add you as an authorized user on one of their credit cards.
- Check your credit reports. Closely review your credit reports for inaccuracies that might be hurting your credit scores, such as fraudulent past-due accounts or incorrectly reported late payments. You have the right to file disputes with the credit bureaus and ask them to review and verify the information in your report.
- Delay other loan applications. Applying for and opening new credit accounts might hurt your credit scores, so it may be best to hold off until you have your new car.
- Add payments with Experian Boost®ø. The free Experian Boost feature lets Experian members add eligible utility, phone, streaming services, rent and insurance payments to their Experian credit reports. These payments can improve your credit history and may increase some of your credit scores.
Learn more >> How Long Does It Take to Build a Good Credit Score?
Find Out What's Impacting Your Credit the Most
If you want to take a more targeted approach to improving your credit scores, a free Experian account lets you track your FICO® Score☉ and credit report with daily updates. You can see how recent changes might have helped or hurt your credit scores, and find out how your unique credit history affects each of the five main scoring categories. Use this information to make better informed decisions about where to focus your efforts moving forward.