By Emily Sherman in Wall Street Journal, featuring Vincent Birardi, CFP®, AIF®, Senior Wealth Advisor
You can get a car loan with a low credit score, but the best rates are reserved for borrowers with high scores
Key takeaways
- Most auto loans are reserved for borrowers with credit scores over 660, but those with lower scores might qualify.
- Higher scores typically unlock lower interest rates.
- Improving your credit by making on-time payments and reducing your credit utilization can increase your approval odds and help you secure better terms.
You can finance a car with most credit scores, though it is harder for borrowers with low scores. Most new auto loans are awarded to prime or super-prime borrowers, or those with scores over 660. Typically, the higher your score, the lower your interest rate.
Auto loan applicants with credit scores of 660 or lower might qualify, but interest rates are likely to be high. Consider improving your score before buying a car to boost your approval odds and get better terms.
Minimum credit score for an auto loan
There is no universal minimum credit score for an auto loan, though some lenders might impose restrictions. However, qualifying with a low credit score might be harder
“Specifically, borrowers with poor or fair credit (those with credit scores below 660) can qualify but often through subprime lenders and loans with higher interest rates,” says Vincent Birardi, CFP, AIF and senior wealth adviser at Halbert Hargrove.
More than 82% of new auto loans in 2025 were for borrowers with credit scores over 660, according to Experian’s State of the Automotive Finance Market for the third quarter of 2025. About 60% of used-car loans were issued to prime and super-prime borrowers in the same period.
| Credit score | Percentage of new-car financing | Percentage of used-car financing |
| Super-prime (781 to 850) | 46.68% | 23.30% |
| Prime (661 to 780) | 35.81% | 36.23% |
| Near-prime (601 to 660) | 11.24% | 18.82% |
| Subprime (501 to 600) | 5.78% | 18.72% |
| Deep subprime (300 to 500) | 0.48% | 2.93% |
Average car loan interest rates by credit score
Interest rates also vary by credit score, with the highest scores securing the best rates for new- and used-car loans.
The average interest rate on new-car loans for borrowers with scores over 780 was more than 10 percentage points lower than for those with scores under 501, per Experian’s report. The gap for used-car loans was even larger.
| Credit score | Average new-car loan interest rate | Average used-car loan interest rate |
| Super-prime (781 to 850) | 4.88% | 7.43% |
| Prime (661 to 780) | 6.51% | 9.65% |
| Near-prime (601 to 660) | 9.77% | 14.11% |
| Subprime (501 to 600) | 13.34% | 19.00% |
| Deep subprime (300 to 500) | 15.85% | 21.60% |
What is a good FICO score?
Several credit scoring models exist, each with different thresholds for “good” or “excellent” credit. VantageScore 4.0, for instance, categorizes scores above 660 as prime and scores over 780 as super-prime.
FICO is another popular credit scoring model used by a large percentage of lenders. Scores of 670 or higher are considered good. FICO classifies scores of 740 and over as very good and scores of 800 and above as exceptional.
The credit score that determines auto loan eligibility varies by lender.
How credit scores impact auto financing
Credit scores are one factor lenders use to determine auto loan eligibility and terms.
“In general, higher scores lead to lower rates, easier approval and better conditions, saving you significant money over the life of the loan. Lenders see those with high credit scores as lower risk, while those with low credit scores are seen as higher risk,” Birardi explains.
Benefits of a high credit score when shopping for an auto loan include:
- Competitive interest rates: The best auto loan ratesare reserved for applicants with the highest scores.
- More repayment terms: Borrowers with high scores might qualify for a wider range of repayment terms than those with low scores, offering more flexibility.
- Better approval odds: Each lender sets a minimum score, but a high score can result in more choices and better approval odds.
- Smaller down payments: You might qualify for a smaller minimum down payment with a high score, as you pose less risk to the lender.
How to improve your credit score before financing a car
Improving your credit before applying for auto financing can help you secure better terms. Increase your score by following these steps:
- Review your credit reports: Request a free weekly copy of your credit report from Equifax, TransUnion or Experian on com. Review it for errors and report incorrect information to the credit bureau as soon as possible.
- Make timely payments: Payment history is the most important factor in your score.
- Reduce your credit utilization: The amount of available credit you use, known as credit utilization, also impacts your score. Aim for a credit utilization ratio of 30% or lower.
- Consider increasing your credit limit: A higher credit limit can reduce your utilization ratio. Ask your credit card issuer if you qualify.
- Avoid closing credit card accounts: Closing a credit card can reduce your utilization ratio by lowering your available credit. It can also negatively impact your average account age—another important score factor—if the account is older.
- Steer clear of applying for other types of credit: New credit applications usually trigger hard inquiries, which reduce your score temporarily.
How to get a car loan with bad credit
You might qualify for a car loan with a low credit score. These steps can help maximize your approval odds.
- Review your credit: Knowing your score provides an accurate picture of your eligibility. Most banks let you check your estimated score for free.
- Aim for a larger down payment: Lenders might offer you better loan terms in exchange for a bigger down payment. “A substantial down payment (possibly 10% to 20% of the total cost of a car) shows commitment and reduces the loan amount,” Birardi says.
- Provide documents showing financial stability: Your credit score is one way to demonstrate financial responsibility. Ask your lender if it considers alternative data, such as rent payments or income, to determine eligibility.
- Add a cosigner: Some lenders allow cosigners. A cosigner with a high score can improve your loan terms or increase your approval odds.
- Compare and prequalify with several lenders: Shop around for the best interest rates and loan terms. Prequalification can provide estimates with a soft pull, which doesn’t harm your credit.
