Credit Score to Buy a Car

Your credit score to buy a car is the single biggest factor determining how much you actually pay — not just the sticker price, but the total cost over the life of your loan. Two buyers can walk into the same dealership, buy the same car at the same negotiated price, and one pays $12,000 more than the other simply because of their credit score. That is not an exaggeration — it is basic math, and we show the exact numbers below.

This guide is specifically about the credit score needed to buy a car. We cover minimum scores by lender type, exactly how each credit tier affects your APR and monthly payment, and a practical 90-day plan to improve your score before you visit a dealership. If you want a general overview of how credit scores work, see our complete credit score guide. This page is exclusively focused on auto purchasing.

What Credit Score Is Needed to Buy a Car?

What credit score is needed to buy a car depends on where you get your financing. There is no single universal minimum — different lender types have different thresholds:

• Buy-here-pay-here lots: No minimum (often work with scores below 500). These dealers finance in-house, meaning they accept almost anyone — but at extremely high rates (15-25%+ APR)
• Subprime auto lenders: 450-550 minimum. Companies like Capital One Auto, DriveTime, and Westlake Financial specialize in bad credit auto loans. Rates: 12-22% APR
• Dealership financing (captive lenders): 500-620 minimum depending on the manufacturer. Toyota Financial, Ford Credit, and GM Financial have tiered programs that start at lower scores but charge higher rates
• Credit unions: 580-620 minimum for most credit unions. Often the best rates for borrowers in the 620-700 range because credit unions are member-owned nonprofits
• Banks (Wells Fargo, Chase, Bank of America): 660+ minimum for most traditional bank auto loans. Competitive rates but stricter approval criteria
• 0% APR manufacturer deals: 720-750+ required. These promotional rates are only offered to the most creditworthy buyers on select new models

The bottom line: what credit score do you need to buy a car? You can buy a car with almost any score — but you should aim for at least 670 before purchasing to avoid paying thousands extra in interest. Every 50-point improvement in your score typically reduces your APR by 1-3 percentage points, which translates directly to lower monthly payments.

Credit Score Tiers and Auto Loan APR Rates

Your credit score for car loan pricing falls into specific tiers that lenders use to determine your interest rate. Here is the breakdown for 2026:

Notice the gap between "Good" and "Poor" — a buyer with a 720 score might pay 6% APR while someone at 580 pays 16% APR. That 10 percentage point difference on a $30,000 loan adds over $10,000 to the total cost of the car. Whats a good credit score to buy a car? Anything above 700 puts you in a strong negotiating position for competitive rates.

Monthly Payment Comparison: Same Car, Different Credit Scores

The credit score to buy a car determines your total cost more than the sticker price does. Here is what the same $30,000 vehicle costs at different credit levels with a 60-month (5-year) loan and no down payment:

The numbers speak for themselves: a buyer with a 500 credit score pays $19,260 in interest on a $30,000 car — nearly two-thirds the cost of the vehicle itself added on top. A buyer with a 780 score pays just $3,522 in interest. That is a $15,738 difference for the exact same car, same dealership, same purchase price. This is why improving your credit score before buying a car is one of the highest-ROI financial moves you can make.

Credit Score for Car Loan: New vs Used Vehicles

Your credit score for a car loan affects new and used car financing differently. Used car loans typically carry higher interest rates than new car loans at every credit tier — usually 1-3% higher APR. There are two reasons for this:

• Higher risk to lenders: Used cars depreciate faster and have shorter remaining lifespans, so the collateral is worth less to the lender if you default
• No manufacturer subsidies: New car promotional rates (0%-3.9% APR) are subsidized by automakers to move inventory. These programs do not exist for used cars

The credit score needed to buy a car also tends to be slightly lower for used vehicles purchased through dealerships — some subprime lenders specialize in used car financing for buyers with scores below 600. However, the APR premium on used car loans means that a used car is not always cheaper than a new car when financing costs are factored in. A $20,000 used car at 16% APR costs more over 60 months than a $25,000 new car at 5% APR ($27,710 vs $28,306 total — surprisingly close).

Minimum Credit Score for a Car Loan by Lender Type

Where you get your car loan matters almost as much as your credit score. Different lender types have different minimums, rates, and approval processes:

Credit unions consistently offer the best value for buyers in the 620-700 credit score range. Because they are nonprofit, member-owned institutions, credit unions typically offer rates 1-2% lower than banks for the same credit profile. You need to become a member first (usually by opening a savings account with $25-$100), but the interest savings on a multi-year auto loan far exceed the membership cost.

650 Credit Score Car Loan: What to Expect

A 650 credit score car loan puts you in the "near prime" category — you will be approved by most lenders, but you will not get the best rates. Here is exactly what to expect with a 650 score:

• Expected APR: 8-12% on new cars, 10-14% on used cars
• Monthly payment (new, $30,000 car, 60 months): approximately $630-$680/month
• Down payment expected: 10-15% ($3,000-$4,500 on a $30,000 car) — lenders prefer a down payment at this score level to reduce their risk
• Approval rate: High — most lenders approve at 650, including banks, credit unions, and dealership financing
• Loan term options: Up to 72 months available, though 60 months is recommended to minimize interest costs

A 650 credit score is the sweet spot for improvement before buying: you are close enough to the 700 threshold that 60-90 days of focused credit improvement (paying down credit card balances, disputing errors) could save you 2-4% APR — which translates to $1,800-$4,200 over the life of a $30,000 loan. The 90-day plan below shows you exactly how to do it.

90-Day Credit Improvement Plan Before Buying a Car

If your credit score to buy a car is not where you want it, a focused 90-day plan can produce meaningful results. Credit scores can realistically improve 30-80+ points in three months with disciplined execution:

Days 1-7: Know Your Starting Point

• Pull your free credit reports from all three bureaus at AnnualCreditReport.com
• Check your FICO Auto Score (the specific score most auto lenders use) through Experian or myFICO
• Identify and dispute any errors — incorrect balances, accounts that are not yours, late payments that were actually on time. Successful disputes can add 20-50+ points

Days 8-30: Reduce Credit Utilization

• Pay down credit card balances to below 30% of each card's limit. Below 10% is even better
• This is the single fastest way to improve your score — utilization changes are reflected within one billing cycle (30 days)
• Do NOT close old credit cards — this reduces your total available credit and shortens your credit history

Days 31-60: Build Positive History

• Make every payment on time — even one late payment can drop your score 50-100 points
• If you have thin credit history, consider a secured credit card or credit-builder loan to add positive tradelines
• Keep all credit card balances low and stable

Days 61-90: Prepare for the Purchase

• Stop applying for any new credit (each application creates a hard inquiry that temporarily lowers your score)
• Check your updated score — you should see improvement from reduced utilization and any resolved disputes
• Get pre-approved by 2-3 lenders (credit union, bank, online lender) within a 14-day window so all inquiries count as one

Getting Pre-Approved for an Auto Loan

Getting pre-approved before visiting a dealership is one of the smartest moves a car buyer can make, regardless of credit score. Pre-approval means a lender has reviewed your credit and income and agreed to lend you a specific amount at a specific rate — before you set foot on the lot.

Why it matters: when you walk into a dealership with a pre-approval letter, you negotiate from a position of strength. The dealer knows they have to beat your existing rate to earn your financing business. Without pre-approval, you are at the mercy of whatever rate the dealer's finance manager offers — and dealers earn profit on every percentage point they mark up your rate.

How to get pre-approved:

• Apply online with your credit union, bank, or an online lender like Capital One Auto, LightStream, or Carvana
• You will need: Social Security number, income verification, employment information, and the approximate vehicle price
• Pre-approval letters typically last 30-60 days
• Apply with multiple lenders within a 14-day window — the credit scoring models treat this as rate shopping (one inquiry) not multiple applications

Cosigner Considerations and Impact on Your Car Loan

If your credit score to buy a car is below 620, a cosigner with good credit can significantly improve your loan terms. A cosigner agrees to be equally responsible for the loan if you default — they are not just a reference, they are on the hook for the full balance.

The impact of a cosigner:

• Rate reduction: A cosigner with a 750+ score can reduce your APR by 5-10 percentage points, potentially saving you $5,000-$15,000 over the life of the loan
• Higher approval odds: Lenders weigh the cosigner's credit history, which can turn a denial into an approval
• Larger loan amounts: The cosigner's income can be considered, allowing you to qualify for a higher purchase price

Important risks for cosigners: the loan appears on both your credit report and the cosigner's credit report. Late payments hurt both scores. If you default, the lender can pursue the cosigner for the full balance. Only ask someone who fully understands and accepts these risks — and who trusts your ability to make payments reliably.

Subprime Auto Loans: Risks and Alternatives

If your credit score for a car loan falls below 620, you are in subprime territory. Subprime auto loans have several risks that can trap borrowers in a cycle of negative equity and financial stress:

• Negative equity: At 15-25% APR, you pay mostly interest in the early years. After 2 years, you may owe more than the car is worth — making it impossible to sell or trade in without writing a check
• GPS tracking and remote disable: Some subprime lenders install devices that track the vehicle and can remotely disable the ignition if you miss a payment. This is legal in most states but feels invasive
• Higher default rates: According to the Consumer Financial Protection Bureau, subprime auto loans have default rates 3-5x higher than prime loans — partly because the high payments create financial strain

Alternatives to Subprime Auto Loans

• Delay and improve: Use the 90-day plan above to raise your score, then reapply at a better rate
• Buy cheaper: A $10,000 reliable used car with a high APR costs far less than a $25,000 car with a high APR. Total interest on $10,000 at 18% over 48 months is $4,152 — manageable compared to $15,682 on a $30,000 loan
• Larger down payment: The more you put down, the lower the loan amount and the less total interest you pay. Aim for at least 20% down to offset the high APR
• Credit union membership: Credit unions offer significantly better rates for subprime borrowers than banks or dealerships. Join before you start car shopping

For a broader understanding of how your credit score affects all aspects of your financial life, see our complete credit score guide. If you need a personal loan for your down payment or want to compare auto loan alternatives, our credit union personal loan rates guide covers the best rates available. If you are also shopping for car insurance, understand that your credit score affects your insurance premium in most states too. Planning to buy a house along with a car? Our mortgage rates guide explains how the same credit score tiers affect your home loan rates.

Frequently Asked Questions About Credit Scores and Buying a Car

What credit score is needed to buy a car?

Most auto lenders require a minimum credit score of 500-660 to buy a car, depending on the lender type. Dealership financing typically starts at 500+, credit unions at 600+, banks at 660+. However, the minimum score only gets you approved — to qualify for competitive interest rates (under 7% APR), you generally need a score of 670 or higher. Scores of 750+ qualify for the best rates, often 4-6% APR on new cars.

Can you buy a car with a 500 credit score?

Yes, you can buy a car with a 500 credit score, but your options are limited and expensive. Buy-here-pay-here lots and some subprime lenders work with scores as low as 450-500. However, expect interest rates of 15-25% APR, which dramatically increases your total cost. On a $20,000 car at 20% APR over 60 months, you would pay $12,798 in interest alone. Consider improving your score for 90 days before buying to save thousands.

What is a good credit score to buy a car?

A good credit score to buy a car is 670 or above. At this level, you qualify for standard auto loan rates (7-9% APR on new cars). Scores of 700-749 are considered "good" and typically get rates of 5-7% APR. Scores of 750+ are "excellent" and qualify for the best available rates. The average credit score for a new car loan in the US is approximately 738.

How much does your credit score affect your car loan rate?

Your credit score has a massive impact on your car loan rate. On a $30,000 car loan over 60 months: with excellent credit (750+) at 4.5% APR, you pay $559/month and $3,522 total interest. With poor credit (550) at 18% APR, you pay $761/month and $15,682 total interest. That is a $202/month difference and $12,160 more in total interest — simply because of your credit score.

Does checking your credit score hurt it before buying a car?

Checking your own credit score through services like Credit Karma, Experian, or your bank is a soft inquiry and does NOT hurt your score. When you apply for an auto loan, the lender performs a hard inquiry, which can temporarily lower your score by 5-10 points. However, multiple auto loan inquiries within a 14-45 day window are counted as a single inquiry, so rate-shop across multiple lenders without worry.

What credit score do you need for a 0% APR car deal?

To qualify for a 0% APR car deal, you typically need a credit score of 720 or higher, though some manufacturers require 750+. These promotional rates are offered by automaker financing arms on select new vehicles only. They are not available on used cars or through third-party lenders. Even with the right score, 0% APR deals are limited to specific models and shorter loan terms (36-48 months).