What’s the minimum credit score to buy a car?

Before you head to the dealership, consider how your credit score will affect how much you are able to spend. Lenders use your credit score as an indication of how likely you are to repay a loan. This means that the higher your credit score, the more favorable your interest rate and terms will be.

In general, you’ll need a FICO credit score of at least 600 to qualify for a traditional auto loan, although there are lenders that offer bad credit auto loans. Because interest rates remain high, securing a subprime auto loan may be more difficult — but not impossible, especially as experts hope for lower rates in 2025.

Experian data from 2024’s third quarter shows that only 5.58 percent of new financing went to borrowers in the subprime or deep subprime category, with scores ranging between 300 and 600. Subprime and deep subprime borrowers looking for used cars fared much better, accounting for 20.75 percent of used financing.

If your credit score is below prime, you may need to look for a bad credit car loan. These typically have higher interest costs than traditional auto financing.

What credit score is needed to buy a car?

Although there is no official minimum credit score needed to buy a car, most lenders have minimum standards when it comes to financing. These standards range based on lender specifics and are present in order to ensure that borrowers are lending to those who can confidently pay back their loans.

Not all lenders use the same credit score reporting agencies as their source of truth. There are two main scoring systems you will encounter when searching for a loan: FICO score and VantageScore. Most lenders use FICO, which ranges from 300 to 850. VantageScore is less common but still ranges from 300 to 850. Both scores use a mix of your credit history, amount owed, balances and available credit — just weighted differently.

Some auto lenders also use a version of the FICO score called FICO Auto Score. This type of scoring is focused specifically on your ability to pay back debts, and these scores range from 250 to 900.

It is possible for lenders to use a different type of credit scoring metric. If you are unsure, reach out to your prospective lender to determine what measure will be used.

Although most lenders cater to borrowers with good to excellent credit, even with poor credit, you can find an auto loan for your needs. You just might need to do a bit more homework to get the best rate. And luckily, your credit score isn’t the sole measure used to determine your interest rate. Even though your credit score makes up a large portion of the pie, lenders will also consider your income, employment history and your debt-to-income ratio (DTI).

How credit scores affect auto loans

Lenders view your credit score as a numerical representation of how likely you are to repay a loan. The higher your credit score, the less risk lenders think you pose. This means that you are more likely to receive more competitive auto loan rates and better terms.

• Better interest rates. In general, a good credit score, usually a score of 680 or above, can ensure a low interest rate.
• Lower monthly payments. The more competitive your interest rate is, the less expensive your monthly vehicle payment will likely be.
• Smaller down payment. With the added layer of good credit, you likely can avoid making a large down payment — although it’s a good idea to put down as much as you can afford to reduce overall costs.
• Higher chance of approval. Lenders viewing you as less of a risk will mean you will be more likely to secure financing over a bad credit borrower, especially if you are financing a new car purchase.

<Bankrate tip> How to check your credit score

Many credit card companies and banks offer a free credit score monitoring service. Outside of this, you can check your credit score from one of the main credit bureaus, Equifax, Experian or TransUnion, directly on their sites.

Auto loan interest rates by credit score

Once you have a grasp on your credit score, it is helpful to understand what average auto loan rates people with your score receive. For some, it may mean working to fix your credit score ahead of application, while for others, it might be smart to focus solely on bad credit lenders.

Data from Experian’s State of the Finance Market Report shows the average interest rates and loan distribution for the third quarter of 2024. The largest segment of borrowers financing a vehicle were in the prime category and also benefited from the second-best available rates.

Super prime borrowers don’t just average the best interest rates — they may also qualify for 0% APR offers. This financing option comes directly from an automaker. It means you can walk away without paying interest throughout ownership, though it makes sense to balance a good APR deal against other offers, like a cash rebate.

Ways to get a car with bad credit

It might be harder to secure a low interest rate loan, but there are still ways to get a car loan with bad credit, even if it means potentially higher interest rates.

• Look for subprime auto loans. These types of loans are viewed as a risk for lenders, so while they are available to those with poorer credit scores, they likely still carry high rates.
• Purchase with cash. If you have enough cash to cover the transaction, you can avoid the entire financing process. For many, this is a difficult ask — the average cost of a new car was $48,623 in October, according to Kelley Blue Book.
• Work to improve your credit. If patience is on your side, using credit-building strategies can mean money saved in the future. Take steps like paying down your debts, not opening any new accounts or increasing your available credit.
• Look for errors. Take a deep look at your credit and see if there are any mistakes present that are dropping your score. Keep in mind that it can take up to 30 days to get errors corrected, so give yourself ample time.
• Consider a buy here, pay here dealership. Offering second-chance car loans, these dealerships should only be used if you cannot secure financing anywhere else. Outside of high rates, there will likely be high fees.

Bottom line

While your credit score serves as an important indicator for lenders, don’t let a bad score get in the way of a future purchase. Your credit score is not the only factor involved in the approval process, and there are simple steps you can take to improve your credit before you apply. Start working on it now to improve your chances of a good rate when buying your next car.