What Credit Score Do You Need to Get a Car Loan? A Guide for Buyers

Buying a car is an exciting step, but it often involves financing—and your credit score plays a major role in determining what kind of deal you'll get. One of the most common questions car buyers ask is, “What credit score do you need to get a car loan?”

 

The answer isn’t as simple as one number, but understanding how credit scores influence auto loans can help you plan smarter and save money.

 

 

The Credit Score Range Explained

 

Credit scores typically fall within the following ranges:

 

• 300–579: Poor

 

• 580–669: Fair

 

• 670–739: Good

 

• 740–799: Very Good

 

• 800–850: Excellent

 

While you can qualify for a car loan with nearly any score, the terms you'll be offered—especially your interest rate—will vary significantly based on where you land in that range.

 

Minimum Credit Score to Get a Car Loan

 

There is no universal minimum credit score required to get a car loan, but in general:

 

• A score above 660 usually qualifies you for better interest rates and a broader selection of lenders.

 

• If your score is between 580 and 659, you can still get a loan, but the interest rate will likely be higher.

 

• Scores below 580 fall into the “subprime” category. Financing is still possible, but terms may be less favorable and require a larger down payment.

 

Keep in mind that lenders also look at factors beyond your credit score, such as income, employment history, and current debt levels. So even with a lower score, you may still get approved if other parts of your financial profile are strong.

 

How Credit Scores Affect Interest Rates

 

Your credit score doesn’t just determine if you’ll be approved—it also affects how much the loan will cost you. For example, someone with an excellent score may qualify for a 4% interest rate, while someone with a lower score might be offered 12% or more for the same vehicle.

 

Over a 5-year loan, that difference in interest can add up to thousands of dollars. That’s why it’s so important to understand where you stand before applying.

 

Improving Your Chances of Approval

 

If you’re concerned your score might not be high enough, there are steps you can take before applying:

 

• Check Your Credit Reports: Look for errors or outdated information. Even small inaccuracies can drag your score down.

 

• Pay Down Debt: Reducing your credit card balances can improve your credit utilization ratio, which helps raise your score.

 

• Avoid New Debt: Don’t take on other loans or open new accounts in the months leading up to applying for a car loan.

 

• Make Timely Payments: Payment history is the biggest factor in your score. On-time payments build trust with lenders.

 

Getting Prequalified

 

Many lenders allow you to get prequalifed for a loan without affecting your credit score. This gives you a clearer idea of what rates and terms you might be offered, helping you plan your budget more effectively.

 

Other Factors Lenders Consider

 

While your credit score is crucial, lenders also evaluate:

 

• Your income: Can you afford the monthly payment?

 

• Your employment status: Is your income stable?

 

• Your down payment: A larger down payment reduces the lender’s risk.

 

• The vehicle itself: Newer or more reliable cars may qualify for better financing terms.

 

Final Thoughts

 

So, what credit score do you need to get a car loan? The truth is, you can get a car loan with almost any score—but the better your credit, the better your deal. If your score is low, focus on improving it before applying, or prepare for higher interest rates and more stringent loan terms.

 

Knowing where you stand and what to expect can make the car buying process smoother, smarter, and more financially sound.

 

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.