What Credit Score Do I Need To Buy a Car?
Written by
Rudri Patel
Edited by
Elizabeth Constantineau
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Your credit score determines the kind of car loan you can qualify for — and the interest rate you’ll pay. While a score over 800 gets you the best terms, a score of 600 can still get you approved for a used car loan. Here’s a breakdown by FICO score:
| FICO Score | Credit Rating | Loan Approval Odds | Typical Interest Rate | Notes |
|---|---|---|---|---|
| 800 to 850 | Exceptional | Very high | Best, as low as 3% | Qualifies for 0% APR |
| 740 to 799 | Very good | High | Low, 3% to 5% | Strong approval odds |
| 670 to 739 | Good | Moderate to high | Moderate, 5% to 7% | Qualified with reasonable interest rate |
| 580 to 669 | Fair or subprime | Moderate to low | Higher, 8% to 15% | May require larger down payment |
| 300 to 579 | Poor or deep subprime | Low | Very high, 15% to 25% | -Limited approval -Can be subject to predatory lending |
Why Your Credit Score Matters More Than You Think
Your credit score doesn’t just affect whether you’re approved — it directly impacts how much your loan will cost over time. Even a small difference in your score can mean thousands of dollars more in interest payments.
How Your Credit Score Impacts Interest Costs
Say you take out a $25,000 auto loan for 60 months:
- At 4% APR, you’ll pay around $2,624 in interest
- At 7% APR, you’ll pay around $4,676
That 3-point difference adds over $2,000 to the total cost of your loan.
Credit Score Needed for a New vs. Used Car
To purchase a new car, you need a credit score of 660 or higher. With this score, you may get longer loan terms and dealer incentives. The interest rate will likely be between 3% to 6%.
To buy a used car, you need a credit score of at least 600 or higher. You will get shorter loan term options and fewer incentives. Interest rates, in this case, will be around 6% to 12%.
Can You Buy a Car With No Down Payment?
You can buy a car without a down payment, and here is when it is possible:
- You have a strong credit score. Usually, the score is over 680.
- You take advantage of a dealer’s special promotion where they require $0 down.
- As a substitute for the down payment, you can trade in your car.
- You’re financing through a credit union.
If the down payment is waived and your credit score is low, you might face the following:
- Higher monthly payments
- Stricter credit requirements
- Higher interest over the life of the loan
Minimum Credit Score To Buy a Car Without a Cosigner
Most lenders require a 620 or higher credit score without a cosigner. Take a look at the breakdown:
| Credit Score | Can You Buy Without a Cosigner? | Notes |
|---|---|---|
| 720+ | Yes, strong chance for approval | Best rates for your loan |
| 660 to 719 | Yes, very likely | Competitive rates and moderate down payments required |
| 620 to 669 | Possible, but considered near-prime | -Requires proof of steady income -Higher interest rate |
| Below 620 | Unlikely, cosigner likely needed | -Subprime loan -Large down payment required |
How To Improve Your Credit Score Before Buying a Car
There are proactive measures you can take to improve your credit score before buying a car. Here are some actions you can take:
- Pull your credit report. Review your credit report for any errors. You can pull your credit report for free through AnnualCreditReport.com.
- Pay down credit card balances. Paying off one card can give your credit score a boost.
- Make every payment on time. Payment history is 35% of your credit score.
- Avoid new hard inquiries. Each loan or card application can lower your credit score.
How To Get a Car With Bad Credit
Do you have bad credit? Here are some practical tips you can use to buy a car:
- Check your credit score first: This should ideally happen before you start your hunt for a new car.
- Set a realistic budget: Include car maintenance, car insurance and loan costs in your calculation.
- Get preapproved for your loan: You may be able to get a lower interest rate if you’re already preapproved for your loan from a credit union or bank.
- Shop around: Don’t settle for the first offer when buying a car.
- Bring a cosigner: If you have a friend or family member willing to cosign on your loan, you may be able to get a better interest rate.
- Choose a reliable used vehicle: Getting a reliable used vehicle could also help lower costs.
- Make a large down payment: This will lower the amount you can borrow and lower the interest rate.
Best Places To Get a Car Loan Based on Your Credit Score
You can get a car loan at banks, credit unions, online lenders and dealerships. Here’s the rundown of the credit scores you need to qualify at these places and the pros and cons of each.
Banks
Best for: People who have good to excellent credit
Pros
- Competitive rates for those who qualify
- Convenient if you’re already a bank customer
- Strong customer service
Cons
- Stricter approval requirements
- Not as flexible for lower credit scores
Credit Unions
Best for: Members who have fair to good credit and are also members of a credit union
Pros
- Lower interest rates than most banks
- More flexible credit requirements
- Community focused
Cons
- Must become a member
- Limited online tools
Online Lenders
Best for: All credit types
Pros
- Fast application process
- Easy comparison of loan terms
- Some lenders extend loans to those who have bad credit
Cons
- Higher rates for poor credit scores
- Some offers may include fees
- No in-person support
Dealerships
Best for: If you want to buy a certified used or new car
Pros
- Easier approval for poorer credit
- Manufacturer incentives
- One-stop shopping for buying a car and financing
Cons
- Higher interest rates if you don’t qualify for dealer incentives
- Dealers may mark up rates for commissions
- May receive pressure for add-ons
Final Take
It’s not a secret — the better your credit score, the more likely you are to get a more favorable loan option. For those who don’t have ideal credit scores, you can still secure a loan by offering a larger down payment or adding a cosigner. If you have unfavorable credit, there are ways to still finance a car, but you may have shorter loan terms and higher interest rates.
FAQs About Credit Scores and Auto Loans
Have questions about how your credit score affects car financing? Here's what you need to know before heading to the dealership.- What credit score do I need to buy a car in 2025?
- To buy a car, you will need a credit score of at least 600.
- What is the minimum credit score to buy a car?
- There is no official minimum credit score to buy a car, but some subprime lenders will accept scores between 500 and 600.
- How can I raise my credit score 100 points in 30 days?
- It may be difficult to raise your score 100 points in 30 days, but you can do the following:
- Dispute errors on the credit report
- Make on-time payments on all account balances
- Avoid hard inquiries
- Pay down credit card balances
- It may be difficult to raise your score 100 points in 30 days, but you can do the following:
- Can I get a car with a 600 credit score?
- You can get a car with a 600 credit score, but the score is subprime. You will likely have to pay a larger down payment and a higher interest rate.
- Can I get a car with a 550 credit score?
- You can get a car with a 550 credit score, but it will likely be a subprime loan. You may face higher interest rates and shorter terms, or may need a co-signer on the loan.
