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What Credit Score Do I Need To Buy a Car?


If you’re planning to finance a vehicle, but don’t have the best credit, you may be concerned about your chances of being approved. You may be asking, “What credit score do I need to buy a car?” You’ve come to the right place for answers.

Your credit score is an incredibly important determinant of not only approval but also the rate you can get and how much money you can borrow. To learn more about the relationship between credit history and a car loan, keep reading.

How Lenders Use Your Credit Score

When you apply for a car loan, lenders use a number of metrics to determine what kind of loan they should offer you. These include factors such as your employment history, debts — and more importantly — your credit score. Your credit score is a number between 300 and 850 that is used to estimate how trustworthy you are as a borrower. 

Your credit score takes into account several factors, including the number of lines of credit you have, repayment history, debt, and the length of your credit history. There are multiple types of credit scores, but the FICO credit score is the most commonly used.

The Ins and Outs of a Good Credit Score

Your credit score can dramatically affect not only your loan options but also available interest rates. A recent Experian report showed that the difference in the interest rate of car loans between borrowers with super-prime credit (781+) versus deep subprime credit (300-500) can be over 10%.
The same report provides a detailed analysis of the impact your credit score has on the amount you can borrow and at what interest rate. In short:

  • Buyers with Super-Prime credit (781-850) have an average interest rate of 3.24% and an average loan about of $33,690
  • Buyers with Prime credit (661-780) have an average interest rate of 4.21% and an average loan of about $37,866
  • Buyers with Nonprime credit (601-660) have an average interest rate of 7.14% and an average loan of about $36,912
  • Buyers with Subprime credit (501-600) have an average interest rate of 11.33% and an average loan of about $32,284
  • Buyers with Deep-Subprime credit (300-500) have an average interest rate of 13.97% and an average loan of about $28,991 

These differences in credit score equate to major discrepancies both in the amount of money you will pay over the life of the loan, but also the monthly payment for your vehicle.

What Credit Score Is Needed to Buy a Car?woman buying a car

Many customers who are in the market for a new vehicle will wonder if their credit score is too low to even purchase a vehicle. The good news is that there is no bottom line cut off for a credit score in order to purchase a vehicle. In general, this varies from lender to lender and depends on each financial institution’s policies.

In other words, even if you have a low credit score, you are still likely to be able to find a lender who is willing to work with you. You’ll probably have to shop around, though. For example, if you’ve been rejected for loans from banks and online lenders, you might want to consider heading to your local credit union. 

Credit unions, like OUCU Financial, are not-for-profit institutions, owned by their members, and place a strong emphasis on customer service. Because of their not-for-profit status, they are often able to accept and work with borrowers who have lower credit scores. 

At OUCU Financial, we want to do our best to serve our members’ needs, so we often look to create a favorable solution for you, not a black and white judgment solely based on your credit score.

How to Improve Your Credit Score for an Auto Loan

Even if you can get approved for an auto loan with a low credit score, keep in mind that the loan you get with the lower score will likely be more expensive than the one you could get with a higher score. So it’s a good idea to try and improve your credit as much as possible before shopping for loans. 

If you know you are planning on taking out an auto loan soon, try to stay on top of your finances. The best way to improve your credit score is to be responsible with your existing loans and credit cards, pay your bills on time, and try to reduce your debt as much as possible. Check out the Repairing Your Credit Coach from Banzai Financial Wellness for more personalized suggestions.  

If you do not have a credit history, you may want to consider getting a credit card. Credit cards can be a good choice for those with minimal credit to start building their credit history and proving their trustworthiness as a borrower.

Understanding Credit Score Requirements to Buy a Car 

Whether you have a high or low credit score, the next step when looking for an auto loan is to shop around at various lenders. Comparing the available rates between different financial institutions means you’re more likely to get the best deal you can. 

Getting pre-approved can also help you compare your loan options. Pre-approval is a process whereby lenders review your preliminary loan application. The pre-approval process tells you how much you are likely to get approved to borrow.

Let OUCU help you get a loan for your next car. Get started today!

5 Reasons to Get Pre Approved  Learn More About OUCU Auto Loans


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