What is the lowest credit score to buy a car?
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.
It's possible to get a car loan with a credit score of 500, but it'll cost you. People with credit scores of 500 or lower received an average rate of 14.08% for new-car loans and 21.32% for used-car loans in the first quarter of 2023, according to the Experian State of the Automotive Finance Market report.
Car Loans with a 493 Credit Score
Less than 7% of auto loans go to people with a credit score in the 300-539 range, and the share of loans given to applicants with a 493 credit score in particular is likely just a small fraction of that. As a result, your odds of getting approved for a decent auto loan are slim.
There is no set minimum FICO® Score to get a car loan. However, a good score at 720 or better will get you the best rate. Consider spending some time improving your credit score before shopping for your next car.
How to qualify for a 0% APR car deal. Zero percent financing deals are generally reserved for borrowers with excellent credit — typically classified as a credit score of 800 and above.
The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.
- Best for shopping around: myAutoloan.
- Best for buying a car online: Carvana.
- Best from a big bank: Capital One Auto Finance.
- Best for used vehicle selection: CarMax Auto Finance.
- Best for refinancing: Autopay.
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.
A poor credit score falls between 500 and 600, while a very poor score falls between 300 and 499. “In general, people with higher scores can get more credit at better rates,” VantageScore says. So you could have trouble getting approved for higher-limit, low-interest cards with a credit score of 600 or below.
It's essential to be knowledgeable about how your auto loan process will be different than someone with a higher score. You might not have the same options, but you can still get an auto loan with a 600 credit score.
What is FICO score vs credit score?
A credit score is a three-digit number that measures your financial health and how well you manage credit and debt. FICO scores are a specific type of score that lenders can use when making borrowing decisions.
You can borrow $50,000 - $100,000+ with a 720 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
| Lender | Loan Amounts | APRs |
|---|---|---|
| SoFi | $5,000 - $100,000 | 8.99% - 29.99% Fixed APR with all discounts |
| Wells Fargo | $3,000 - $100,000 | 7.49% - 23.24% |
| USAA | $1,000 - $100,000 | 7.24% - 17.65% |
| Discover | $2,500 - $40,000 | 7.49% - 24.99% |
According to MyFICO, as of November 2022, the average APR on a 60-month new auto loan for someone with a FICO Score of 720 or higher is 5.64%. With a score in the 690-719 range, it's 6.83%. And for a borrower with a score in the 660-689 tier, the average APR is 9.19%.
Paying cash for your car may be your best option if the interest rate you earn on your savings is lower than the after-tax cost of borrowing.
How to Qualify. A FICO score of 610 or higher, and no 90-day overdue accounts, charge-offs, collections, repossessions or foreclosures in your credit history.
You could also talk with a local Toyota dealer. Toyota is straightforward about what credit score is needed to buy a car with their financing, and you won't qualify if you have bad credit. Toyota Financial Services requires you to have a score of at least 610 to qualify for an auto loan.
Auto lenders may rely more on Equifax and Experian for credit report insights, but TransUnion also sells consumer data to a number of automotive lenders. Credit scoring models such as FICO® Auto Score 9 generate a credit score based on the debt and payment information in a consumer's credit report.
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.
Which credit score is used most?
FICO ® Scores are the most widely used credit scores—90% of top lenders use FICO ® Scores. Every year, lenders access billions of FICO ® Scores to help them understand people's credit risk and make better–informed lending decisions.
| Company | Forbes Advisor Rating | Minimum rate |
|---|---|---|
| PenFed Credit Union | 4.7 | Starting at 5.24% |
| Consumers Credit Union | 4.2 | Starting at 6.54% (with autopay) |
| Digital Federal Credit Union (DCU) | 3.7 | Starting at 6.74% (with autopay) |
| USAA | 3.7 | Starting at 6.09% (with autopay) |
| Company | Used APR Range | Used Loan Amounts |
|---|---|---|
| PenFed Best Overall | 6.49%–17.99% | $500–$150,000 |
| AUTOPAY Best for Bad Credit/Low Rates | As low as 5.69% | $2,500–$100,000 |
| Consumers Credit Union Best Credit Union | As low as 6.84% | $500–$350,000 |
| LendingTree Best for Refinance | As low as 5.99% (Refinance) | Not disclosed |
Top Banks like Canara Bank, HDFC Bank, ICICI Bank, Punjab National Bank, and State Bank of India are providing the cheapest car loans. Canara Bank interest rates range from 8.80 percent to 11.95 percent. HDFC Bank car loans start from 8.75 percent. I...
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. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.
