What Credit Score Do I Need to Buy a Car?
There's no set minimum credit score required to get a car loan. Whether your credit is excellent, fair, poor, or limited, you can likely still qualify, though your rate, down payment, loan amount, and terms will vary depending on your credit profile. Credit score is just one factor in the equation; lenders like banks and credit unions also consider things like your income, existing debt, down payment amount, and the vehicle you're looking to finance.
Credit Score Categories
| Credit Score | General Category | What to Expect |
|---|---|---|
| 781-850 | Super Prime | Strongest rates and financing option |
| 661-780 | Prime | Competitive rates and broad vehicle selection |
| 601-660 | Near Prime | Financing may be available at higher rate |
| 501-600 | Subprime | Higher rates or a large down payment may be required |
| 300-500 | Deep Subprime | Approval is challenging, but some options may exist |
How Does Credit Score Affect Getting a Car Loan?
Interest Rate: General rule of thumb is the higher your credit score, the better your chances are of locking in a lower APR financing rate. According to recent Experian data, average auto-loan APRs vary significantly depending on which credit tier a borrower falls into.
Monthly Payment: Besides credit, your down payment may affect your car payment and approval.
Down Payment: For a shopper with limited or no credit, lenders may ask for more money down.
Loan Approval and Amount: This is highly influenced by credit score.
Do Banks Look at Other Factors for Car Loan Approval?
Lenders look at several factors before approving a car loan, including:
- Monthly and annual income
- Employment and job history
- Debit-to-income ratio
- Housing expenses
- Down Payment
- Trade-in Equity
- Previous auto-loan history and if payments were on time
- Vehicle age, mileage, and value
- Requested loan term
- Co-Buyer credit score
Tips to Improve Your Odds of Getting Approved for Automotive Financing
- Review credit reports for inaccurate information.
- Make current payments on time.
- Reduce credit-card balances when possible.
- Save for a down payment.
- Gather recent proof of income and residence.
- Choose a vehicle that comfortably fits the budget.
- Consider a qualified co-borrower.
- Compare the APR, term and total loan cost.
What Documents Are Needed for When Applying for a Car Loan?
Be prepared for financing by bringing a valid driver’s license, proof of income, proof of residence, proof of insurance, down payment information, trade-in title or payoff, and co-buyer information.
Frequently Asked Questions About Credit Scores
Can I get a car loan with a 600 credit score?
A 600 score does not automatically prevent someone from financing a vehicle. However, the lower the credit score the higher APR financing and more money that may be needed for a down payment.
Can I buy a car if I don't have I dont have any credit?
We have first-time buyer programs available at Speck Buick GMC of Tri-Cities. Luckily, having zero credit is different than having bad credit. Lenders may place more emphasis on monthly income, employment history, and having a co-buyer.
Does it hurt my credit score each time I apply for a car loan?
Finance Pre-approvals are not the same as full credit applications. Shopping for a car loan usually has no lasting impact compared on credit scores.
| Monday | 8:30AM - 7:00PM |
| Tuesday | 8:30AM - 7:00PM |
| Wednesday | 8:30AM - 7:00PM |
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| Monday | 7:30AM - 5:30PM |
| Tuesday | 7:30AM - 5:30PM |
| Wednesday | 7:30AM - 5:30PM |
| Thursday | 7:30AM - 5:30PM |
| Friday | 7:30AM - 5:30PM |
| Saturday | 8:00AM - 4:30PM |
| Sunday | Closed |
| We will be closed Sunday April 5th for Easter. | |
| Monday | 7:30AM - 5:30PM |
| Tuesday | 7:30AM - 5:30PM |
| Wednesday | 7:30AM - 5:30PM |
| Thursday | 7:30AM - 5:30PM |
| Friday | 7:30AM - 5:30PM |
| Saturday | 8:00AM - 4:30PM |
| Sunday | Closed |
| We will be closed Sunday April 5th for Easter. | |