What is a Good Credit Score to Buy a Car?

Car sales have plunged over the last few years and that’s good news for anyone trying to buy a new or used vehicle. The credit score you need to get a loan has decreased and rates are still low.

Let’s look at what credit score you need to buy a car and how to get a loan even on bad credit.

What Credit Score do Car Lenders Use?

FICO uses information from your credit report to assign a score from 300 to 850 and reports that 90% of car lenders use their score.  

Minimum Credit Score for a Car Loan

The average credit score for a car loan is 714 FICO for a new car and 655 for used but that’s average so it’s going to be much higher than the minimum.

Can I Get a Car Loan on Bad Credit?

You can definitely get a car loan with bad credit. As mentioned, auto lenders and everyone else in the industry are pushing to open up to more customers. 

Average Car Loan Rates by Credit Score

For the borrower with fair credit and a 10% rate, the payment would come to $318.71 per month. For the bad credit car loan at 18% annually, the payment would be $380.90 a month.

How to Get a Car Loan on Bad Credit

1. Pay off your credit cards or at least pay them down to less than a third of your limit 2. Do not close any credit accounts or apply for a loan within a few months

How to Get a Car Loan on Bad Credit

1. Apply to at least three lenders to make sure you’re getting the best rate available  2. Don’t go to buy-here, pay-here dealers.  

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