What Is the Lowest Credit Score to Buy a Car?

Is There a Minimum Credit Score to Get a Car Loan?

Some auto lenders have a minimum credit score, but there isn't an overall minimum score to get a car loan. There are lenders that offer loans to applicants with low scores—and to borrowers who don't have any credit history or score.

Car loans tend to have higher interest rates and fees if you have poor credit. But no matter your credit score, you'll generally receive a lower interest rate with an auto loan than an unsecured personal loan because the vehicle you're buying secures the auto loan. If you miss a payment, the lender can repossess and sell the car, which limits its potential losses.

Learn more: What Credit Score Do I Need to Get a Car Loan?

How Your Credit Score Impacts Your Auto Loan Interest Rate

Although there are options for getting a car loan with a low credit score, your credit score could impact how much you can borrow, the fees you'll pay, your down payment and the interest rate on your loan.

Recent data from Experian shows how higher credit scores correlate with lower average annual percentage rates (APRs) for new and used cars. A low APR can help lower your monthly payments, which might save you money overall or allow you to take out a larger loan.

Source: Experian State of the Automotive Finance Market, third quarter 2024; VantageScore^® 4.0 used

Learn more: What Does Subprime Mean?

Additional Factors That Affect Buying a Car

Lenders often consider a variety of factors when determining if they'll approve your auto loan application and your offers' terms. These could include:

• Down payment: You may be able to get a car loan without a down payment if you have good credit. However, larger down payments might lead to a lower interest rate or be a requirement if you have a low credit score.
• Income and debt-to-income ratio (DTI): Your income and your monthly income relative to your monthly debt payments, or your DTI, can be just as important as your credit. A higher income and lower DTI will help you qualify for the best loans.
• Lender fees: You might have to pay higher or more fees, such as an origination fee, to get an auto loan with a low credit score.
• Promotional offers: A dealership or manufacturer's finance arm might offer a low or 0% APR promotional rate to buyers who have good to excellent credit and a low DTI.
• Loan repayment terms: You may be able to choose from different repayment terms, or how long you'll have to repay the loan. A longer-term loan can lead to lower monthly payments, but these tend to have higher interest rates and you'll wind up paying more overall.

All these factors can affect how much you can borrow and the APR on your loan. You'll want to compare offers and consider how much you can afford to pay—or want to pay—each month. Don't forget all the additional costs that can come with owning the car, such as registration, insurance, maintenance and repairs.

You can use Experian's car payment calculator to see how changing the repayment terms or interest rate on a loan will affect the monthly payment.

Learn more: How to Get Approved for a Car Loan

How to Improve Your Credit Score

There are many ways to potentially improve your credit score. You can get your FICO^® Score^☉ and credit report for free from Experian to see where you're at and what's helping or hurting your credit the most right now. Then consider these suggestions for improving your credit.

• Pay your bills on time. Your payment history is one of the most significant scoring factors. Even one late payment could hurt your credit, and the late payment can stay in your payment history for up to seven years. If you have recent late payments, try to bring the accounts current and continue making at least your minimum monthly payments on time to help your credit scores over time.
• Lower your credit utilization ratio. Your credit utilization ratio is a comparison of your revolving accounts' balances and credit limits as they appear in your credit report. Paying down credit card balances, or making early credit card payments if you usually pay the bill in full, helps lower your utilization rate and might quickly increase your credit scores.
• Don't close old credit cards. It can be tempting to clean out your wallet and drawers and close credit cards that you don't use. However, keeping cards open gives you more available credit, which can help lower your utilization rate. There are exceptions, though, such as when the card has an annual fee and you'd prefer to save money than have more available credit.
• Deal with collection accounts. If you find collection accounts in your credit history, you could try to settle or pay off the accounts. Although the collection accounts will stay on your credit report for seven years, newer credit scores—including scores that many auto lenders use— ignore paid collection accounts.
• Hold off on applying for credit. Loan and credit card applications might hurt your credit scores, and opening new accounts can also lead to a temporary score drop. If you're focused on buying a car, try to hold off on applying for other loans or a credit card until after you're behind the wheel.
• Use Experian Boost^®ø. Experian members can use the free Experian Boost feature to add eligible utility, phone, streaming service, rent and insurance payments to their Experian credit report. Adding eligible payments could help improve your credit scores based on the report.
• Become an authorized user on a credit card. You can try asking close friends or family members to add you as an authorized user on a credit card. The credit card issuer might report the account's history to the bureaus under your name, which could potentially improve your scores.

Learn more: How to Get the Best Auto Loan Rates

How to Get a Car Loan With Bad Credit

Here are several steps you can take to get an auto loan with bad credit:

• Set your budget and save for a down payment. Figure out approximately how much you can afford to pay each month for an auto loan, the related costs of owning a car and your down payment. If you have a car, consider whether trading it in or selling it directly to a buyer and using the money for a down payment makes more sense.
• Learn about different types of lenders. Knowing where to look for an auto loan can be important. Banks, credit unions and some online lenders might have options. Some dealerships can also help you shop for a loan, although the interest rate might be higher than if you went directly to the lender yourself. There are also buy here, pay here (BHPH) lenders that work with borrowers who have bad or no credit. But treat them as a last resort because the loans tend to have high interest rates and fees.
• Try to get prequalified for several car loans. See if you can get preapproved or prequalified for auto loans from multiple lenders. Lenders sometimes use the terms interchangeably, but start with options that only require a soft credit check—the type that doesn't affect your credit scores. Once you find a loan that works for your needs, get a preapproval letter from the lender that you can then take to the dealer to show you're ready to buy (they may try to match or even improve your terms).
• Choose a rate-shopping window. Preapprovals and applications that result in a hard inquiry may hurt your credit scores a small amount. However, multiple hard inquiries for auto loans that occur within a 14-day window will only count as one inquiry for scoring. With this in mind, wait until you're ready to buy to seek loan preapprovals.
• Consider a cosigner. You might qualify for more loans and better terms if you can get someone with good credit to cosign your auto loan. But consider the impact on your relationship first. They will be legally responsible for the debt, it could impact their DTI and missing a payment could hurt their credit.
• Go with the best offer. Review your auto loan offers to see which one works best with your budget. If you didn't get a good offer, you could try to get preapproved with more lenders or dealerships. Or, see if you can get preapproved for a smaller loan and buy a different vehicle.

Your auto loan will likely have a high APR, but you may be able to refinance with a lower-rate loan as your credit score improves. If this is your plan, review your loan's terms for a prepayment penalty—an extra fee that you may need to pay if you want to pay off your auto loan early.

Learn more: Subprime Auto Loan: Guide & Rates

Monitor and Improve Your Credit

Keeping an eye on your credit can be helpful when you're first thinking about buying a car, actively shopping and after you get a loan. Experian's free credit monitoring feature offers daily updates and customizable alerts that you can use to track your progress. You can also find out how different information in your credit report affects your credit scores, and try to figure out the best way to improve your credit based on your unique credit profile.