The credit score you need depends on the type of loan and the lender
There is no single credit score required to buy a car. Different lenders set different minimums, and the score that matters changes based on whether you are financing through a bank, credit union, or the dealership itself. A score of 620 is often cited as a rough floor for traditional auto loans, but some lenders will work with scores below that, and others require 700 or higher. The real answer is: it depends on who you are borrowing from.
Your credit score is one factor among several. Lenders also look at your income, how much you are putting down, the age and price of the car, and whether you have a co-signer. A lower score does not automatically disqualify you — it usually means you will pay a higher interest rate, which makes the loan more expensive over time.
Key Takeaways
- Traditional bank and credit union auto loans typically require a credit score between 620 and 660, though some lenders go lower and others require 700 or more.
- Dealership financing (often called "buy here, pay here" or in-house loans) may accept scores below 600, but charges much higher interest rates and fees.
- A lower score usually means a higher interest rate, which increases the total amount you pay over the life of the loan.
- Putting down a larger down payment can sometimes offset a lower credit score and improve your chances of approval.
- Checking your credit report before you shop helps you understand what lenders will see and catch errors that might be lowering your score.
How credit scores affect your interest rate
Lenders use your credit score to decide not just whether to lend to you, but how much interest to charge. The relationship is direct: a higher score usually means a lower rate. The difference between a 620 score and a 750 score can be 3 to 5 percentage points on an auto loan, which translates to thousands of dollars over a five-year loan.
For example, a $25,000 loan at 5 percent interest costs roughly $2,650 in interest over five years. The same loan at 10 percent interest costs roughly $6,600. That gap comes largely from credit score differences. This is why even if you can get approved with a lower score, understanding what rate you will actually pay matters before you sign.
Credit score ranges and what lenders typically require
Most traditional lenders — banks and credit unions — have score cutoffs. A score of 620 to 660 is often the minimum for approval, though some will go as low as 580 or 600 with a larger down payment or a co-signer. Scores above 700 usually may have access to for the best rates available. Scores between 660 and 700 fall in a middle range where approval is likely but the rate will be higher than someone with excellent credit would receive.
Dealership financing is different. Many dealerships will finance someone with a score below 600, or even someone with no credit history at all. The trade-off is that interest rates are much higher — sometimes 15 to 29 percent — and the loan terms are often shorter and stricter. Some dealership loans require payment in full if you miss even one payment, which is not typical of bank loans.
Credit unions often have lower score requirements and lower rates than banks, especially if you are a member. If you belong to a credit union, checking their auto loan requirements before you shop at a dealership can save you money.
What happens if your score is below 620
A score below 620 does not mean you cannot buy a car. It means your options narrow and your costs rise. You can still finance through a dealership, through a buy-here-pay-here lender (a company that finances and also sells used cars), or by finding a co-signer with better credit who agrees to be responsible for the loan if you do not pay.
A co-signer is someone who signs the loan with you and is legally liable if you default. Lenders are more willing to approve a lower-score borrower if a co-signer with good credit is on the loan. The co-signer does not have to be a family member, but they do have to be willing to take on the risk.
Before you accept a high-rate loan, consider whether waiting a few months to improve your score makes sense. Paying down existing debt, correcting errors on your credit report, or bringing past-due accounts current can raise your score. Even a 30 or 40-point improvement can lower your interest rate by half a percent or more.
How to check your credit before you shop
You can check your credit score for free through several services. AnnualCreditReport.com is the federally mandated site where you can pull your credit report from all three bureaus (Equifax, Experian, and TransUnion) once per year at no cost. Your report shows what lenders see: your payment history, how much debt you carry, how long you have had credit accounts, and any negative marks like late payments or collections.
Your credit score itself (the three-digit number) is different from your report. You can see your score free through many banks and credit card companies, or through services like Credit Karma or NerdWallet. These scores are usually accurate enough to give you a sense of where you stand, though the exact score a lender sees may differ slightly.
Check your report for errors before you apply for a car loan. If you see a late payment that was not yours, or an account you do not recognize, you can dispute it with the bureau. Errors can lower your score unfairly, and fixing them takes time — usually 30 to 60 days — but it is worth doing before you shop.
Down payment size and credit score
A larger down payment can sometimes make up for a lower credit score. When you put down more money, the lender's risk goes down because they are lending a smaller percentage of the car's value. Some lenders will approve a lower-score borrower if the down payment is 15 or 20 percent instead of 5 or 10 percent.
Down payment size also affects your monthly payment and total interest cost. A $5,000 down payment on a $25,000 car means you are financing $20,000. The same car with a $10,000 down payment means you are financing only $15,000. Over five years, that difference in principal saves you money in interest, regardless of your credit score.
Pre-approval versus shopping around
Getting pre-approved for a loan before you go to the dealership gives you leverage. When you know a bank or credit union will lend you $20,000 at 6 percent, you can walk into a dealership knowing your budget and your rate. You are not dependent on the dealership's financing, which is often more expensive.
Pre-approval also shows you what rate you actually may have access to for based on your credit score. The dealership may offer you a higher rate and hope you do not notice. If you already have a pre-approval letter, you can compare and choose the better option.
Getting pre-approved does not hurt your credit score. A single hard inquiry (the kind that happens when you apply for credit) has a small, temporary impact. Multiple inquiries within a short window — say, two weeks — usually count as one inquiry for scoring purposes, so shopping around with several lenders does not compound the damage.
Frequently Asked Questions
Can I buy a car with no credit history?
Yes, but you will likely need a co-signer or a larger down payment. Lenders have no history to judge you by, so they see you as higher risk. A credit union or buy-here-pay-here dealer may work with you directly, though the rate will be high. Building credit by becoming an authorized user on someone else's credit card or getting a secured credit card before you buy can help.
Does shopping for a car loan hurt my credit score?
Multiple loan inquiries within a short period (usually 14 to 45 days, depending on the scoring model) count as a single inquiry. So shopping with three or four lenders in two weeks has minimal impact. Each inquiry does lower your score slightly, but the effect is temporary and fades within a few months.
What if the dealership says I do not may have access to for financing?
The dealership is not your only option. You can get a loan from a bank, credit union, or online lender and use that money to buy a car from any seller. You can also look into buy-here-pay-here dealers or ask a family member to co-sign. If your score is very low, waiting a few months to improve it before you buy can save you thousands in interest.
Will paying off debt before I buy a car help my score?
Yes, but the timing matters. Paying down debt lowers your credit utilization (the percentage of available credit you are using), which can raise your score. However, closing old accounts after you pay them off can lower your score because it reduces your average account age. Pay down debt but keep accounts open.
Is a co-signer the same as a co-buyer?
No. A co-signer signs the loan but does not own the car. A co-buyer is on the title and owns the car with you. A co-signer is liable if you do not pay, but has no ownership rights. Most lenders use co-signers, not co-buyers, for auto loans.