There really isn’t a minimum credit score for a car loan. Most lenders work with consumers in specific credit score ranges. For instance, banks typically cater to individuals on the upper end of the credit spectrum; subprime auto lenders the lower. Lenders may themselves have minimum credit score requirements, though these are rarely made public. But, in general, there are finance options for all credit score, and there is no numerical score that serves as a minimum threshold for car loans in general.
Keep in mind that your credit score is only one of several factors that will be considered before you are offered a loan. Lenders will also look at the age of the vehicle, mileage, your down payment, debt to income, and total payments in comparison to your income. Each lender has different standards.
- Excellent Credit: As for credit scores only, if your credit score is above 740, you are considered to be in the top tier of borrowers and will be eligible for financing at most any banking institution. You may also qualify for special deals reserved for only the most creditworthy customers, such as zero percent financing on a new car through the automaker’s finance arm. Scores in this range are sometimes termed “super prime.”
- Good Credit: Between 700 and 739, your score is considered to be within the prime range and you will still have a good chance of getting a loan form nearly any institution – including banks, credit unions, and dealer-arranged financing – so long as you meet the other guidelines mentioned above.
- Fair Credit: If your score falls between 660 and 699, you may have a little more difficulty getting a loan. You may need a larger down payment and face a slightly higher interest rate. You may not meet the minimum requirements as some banks. However, credit unions may be willing to work with you, as well as auto finance companies.
- Subprime Credit: 625-659 is considered a subprime credit score. It also carries a more narrower range of lenders and higher interest rates. Lenders will look even more closely at your down payment, debt to income, and total payments before approving a loan. You probably won’t be able to go to just any lender and get approved. Many banks will not lend to customers in this tier. However, there are many subprime auto lenders who serve this range, and many dealers can arrange financing for you.
- Bad Credit: Under 625 is the arena where many traditional lenders – national and regional banks, etc – do not want to play. Fortunately, there are plenty of lenders who are willing to take a chance on subprime borrowers. The money is going to come with higher interest rates, and you will need to provide a down payment in the 20-25 percent range, but you can still get the car loan that you need.
- Really Bad Credit: Under 550 is sometimes known as deep subprime, and is often characterized by previous bankruptcy, repossession, or foreclosure. Many of these customers end up resorting to BHPH dealerships, when they could in fact qualify for a deep subprime auto loan. The interest rates will be exceedingly high, often 20% or higher, but typically, it is still a better experience than resorting to a “no credit check” car lot.
There is no minimum credit score when you apply online here at Keystone Auto Loans. We work with many subprime lenders and dealerships that specializing in help people with sub-prime and deep sub-prime credit.