What Credit Score Do You Need to Get a Car Loan in Ontario?
What Credit Score Do You Need to Get a Car Loan in Ontario?
Posted on July 16, 2025
Buying a car is a big decision—and unless you're paying with cash, you'll likely need a loan to make it happen. But one of the most common questions people ask is: what credit score do you need to get a car loan in Ontario?
The answer isn’t one-size-fits-all. While your credit score plays a major role, it’s not the only factor lenders consider. Let’s break it down so you understand what to expect, and how to improve your chances of approval (and a better interest rate).
Understanding Credit Scores in Ontario
In Ontario, credit scores range from 300 to 900. The higher your score, the better your creditworthiness in the eyes of lenders. Credit scores are typically grouped into the following categories:
- Excellent (760–900)
- Very Good (725–759)
- Good (660–724)
- Fair (560–659)
So, what credit score do you need to get a car loan in Ontario? Most traditional lenders prefer to see a score of at least 660. This falls into the "Good" category and often qualifies borrowers for standard interest rates.
However, if your score is lower, don’t panic—there are still options available.
Loans for All Credit Levels
Lenders in Ontario come in many forms, and not all require perfect credit. Here’s a general idea of how credit scores can impact your car loan options:
- 660 and above: You’re more likely to qualify for loans with competitive rates and flexible terms.
- 600–659: You may still get approved but with slightly higher interest rates.
- Below 600: Approval is possible, but rates will be higher, and you may need to meet additional requirements such as a larger down payment or proof of stable income.
Alternative lenders often work with borrowers who have lower credit scores. They focus more on your ability to repay the loan, looking at your income, job stability, and monthly expenses.
Other Factors That Affect Approval
While your credit score is important, lenders also look at:
- Income level: Can you afford the monthly payments comfortably?
- Debt-to-income ratio: How much of your income is already committed to other debts?
- Employment history: A steady job can help your application.
- Down payment: Putting money down reduces the amount you need to borrow, which lowers the lender’s risk.
- Even with a lower score, having a strong application in these areas can improve your chances of approval.
Improving Your Credit Score Before Applying
If your credit score isn’t where you'd like it to be, there are steps you can take:
- Pay bills on time: Payment history is the biggest factor in your credit score.
- Reduce existing debt: Lower balances on your credit cards can boost your score.
- Check your report for errors: Mistakes happen, and correcting them can make a big difference.
- Avoid applying for multiple loans at once: Too many hard inquiries can hurt your score.
Improving your score even slightly could help you access better loan terms.
Be Cautious with High-Interest Loans
If you do get approved with a lower credit score, be careful about accepting extremely high interest rates. While it may get you behind the wheel quickly, you could end up paying thousands more over the life of the loan.
Use online tools to compare offers, and always read the fine print. Pay special attention to the total cost of borrowing, not just the monthly payment.
Final Thoughts
So, what credit score do you need to get a car loan in Ontario? Ideally, 660 or higher will give you access to the most favorable options. But even if your score falls below that mark, don’t give up—there are still paths to approval.
Focus on building your financial profile, understanding the full cost of the loan, and choosing a lender that matches your situation. With the right approach, you’ll be driving off the lot with confidence—and a loan that works for you.
If you're ready for a car loan in Southern Ontario, we'd love to help with that! Simply fill in the form below to get started.