Car dealerships rely on credit scores to determine if customers are eligible to receive a car loan. But what credit score do they use? What is your likelihood of approval? And what happens if you have no/bad credit? Our team at Car-N-Credit is here to answer all those questions and more!
What Credit Score Do Car Dealerships Use?
When purchasing a car, most car dealerships run your credit score to determine if you are eligible for a loan. These scores come from a variety of different credit bureaus (TransUnion, Equifax, and Experian) that collect data from creditors. Based on the length of your loan, the remaining balance, the payment history, and the monthly payment, you are given a credit score. This credit score is a measure of how “risky” it is to offer you a loan. Most car dealerships use the FICO Score 8 scale to determine your eligibility for a loan.
The FICO score is the most widely used because it is considered to be the most accurate assessment of your credit standing. It takes the scores of all three major credit bureaus to create a FICO score. Based on your score, a car dealership will make the terms of your loan—this includes loan length and APR.
Likelihood of Loan Approval
When it comes to car dealerships, your credit score is a large factor in determining if you can get a car or not. If you are unable to pay for a car in cash upfront, most car dealerships will rely on your credit score to determine if they will offer you a loan. If you are unable to get a loan then you will be unable to get a car. So, let’s break down what score you would need to get a car loan. The FICO score ranges from 300 to 850. 300 is considered a bad score and 850 is considered an excellent score.
- 850-720: Super Prime score—you will receive a loan
- 749-660: Prime score—you will likely receive a loan
- 659-620: Not Prime score—your options may be limited
- 619-580: Sub Prime score—options are severely limited, may not be offered a loan
- Below 580: Deep Sub Prime score—Likely will not receive a loan
Your likelihood to be offered a loan are very dependent on your credit score. It is possible to get a loan in the subprime and deep subprime areas; however, it is very difficult and your APR will be very high.
Loans at Car-N-Credit
At Paul Sherry Car-N-Credit, we understand the difficulty of purchasing a car with a low credit score. We know that things happen and your credit score may suffer as a result. We believe you are more than a number. That is why we don’t pull your credit score. Our financial team works with you to find a used car that fits your budget and your lifestyle. We even take it a step further and work to help your credit score. So when you purchase a car from us we report your on-time payments to TransUnion. This can increase your credit score and get you back into good financial standing.
Purchase a Used Car from Car-N-Credit
When you purchase from Car-N-Credit, we don’t rely on your credit score like other dealerships. We look at the bigger picture. Our financial team can help you get into a used car that fits your budget and needs. Contact our friendly staff to see how we can help you get into a used car. We offer a variety of loan options to customers located within 60 miles of our dealership. Our wide selection of vehicles makes it possible for you to find a car that works for you. So, come on down to our dealership in Piqua, Ohio and browse our inventory, or call us today at (937) 773-0895 for a bad credit car loan!
FAQs
In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender.
What credit score do most car dealers use? ›
The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage.
What FICO score do auto lenders use? ›
The basic FICO and auto loan FICO scores use different credit scoring models. The base FICO score ranges from 300 to 850, but FICO auto scores range from 250 to 900. The FICO auto score that lenders look at is measured using the 9 XT version of auto score measurement.
What credit score is good enough for a car? ›
The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.
Do car dealerships use Equifax or TransUnion? ›
Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.
Which credit score is most accurate? ›
Simply put, there is no “more accurate” score when it comes down to receiving your score from the major credit bureaus.
How to raise FICO score? ›
Keep balances low on credit cards and other revolving credit: high outstanding debt can negatively affect a credit score. Pay off debt rather than moving it around: the most effective way to improve your credit scores in this area is by paying down your revolving (credit card) debt.
Is FICO auto score 8 or 2 used? ›
FICO score 8 and 9 are commonly used for student loans, personal loans, medical loans, credit card lines and auto loans. However, there are industry-specific FICO versions for certain types of debt as well, including auto loans, credit cards and mortgage lending.
Is a FICO score of 8 good or bad? ›
FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score. There are also industry-specific versions of credit scores that businesses use. For example, the FICO Bankcard Score 8 is the most widely used score when you apply for a new credit card or a credit-limit increase.
What credit score is needed to buy a car without a cosigner? ›
There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.
Credit score: You might need a credit score of at least 740 to be considered for a 0% APR loan. The minimum credit score depends on the dealership and the car you're interested in purchasing.
What is a bad credit score for buying a car? ›
Some auto lenders also heavily use an industry-specific FICO model that weighs certain factors, such as past car-loan payments. Its range is 250 to 900. The cut-off number that places a person in a “bad credit” tier differs by credit scoring model, but it's generally in the mid-600s or below.
What credit score do you need for no down payment on a car? ›
Your credit score is crucial to determine your eligibility for a no down payment car loan. Most lenders require a FICO credit score of at least 680 before you can qualify.
What is the minimum credit score for a car loan? ›
Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.
What is a good FICO score? ›
When a car dealership runs your credit, does it go down? ›
When you are ready to buy a vehicle or become serious about acquiring a car loan, group the hard inquiries and pre-approval attempts within two or three weeks. They will appear on your credit report but will be treated as a single hard pull. Therefore, they will only have a minor impact on your credit score.
Is 550 a good credit score to buy a car? ›
When you have bad credit – say, a credit score around 550 – getting approved for a car loan can be difficult. While you should try for a pre-approval with your bank or credit union, you more than likely are going to need a subprime lender.
Is 700 a good credit score to buy a car? ›
As you can see, a 700 credit score puts you in the “good” or “prime” category for financing, making 700 a good credit score to buy a car. While it's always a good idea to get your credit score in its best possible shape before buying a car, if you're already around the 700 range you will be good to go.
What is my FICO auto score 8? ›
It's one of FICO's base credit scores, which means it isn't designed for a certain type of credit. Like other base credit scores, the scores range from 300 to 850. And like FICO's other base credit scores, Score 8 is intended to determine the likelihood that a borrower will pay back a loan.
