What credit score do I need to get a car loan?

Last Modified 16th of February 2021

Buying a car is a big purchase for most people and whilst owning one is often essential for all sorts of reasons many people are not in the position to be able to buy one out right. So it’s understandable then that a high proportion of cars are bought using some form of finance or loan.

Unfortunately (or fortunately if your score is low) it is not as simple as what your score is. Potential lenders will look a little deeper. So before you worry too much about your actual credit score consider this:

There’s no universal scoring system

Experian, Equifax and Call Credit all have their own methods of calculating your credit score based on the information they have. Obsessing over your low credit score with Experian is pointless if the lender you are applying for uses Equifax for its credit checking.

Who is giving you the loan?

When you buy a car on finance, the money can come from a number of places and there can be different interests at play. Often if you buy a car new or nearly new the finance will come from the manufacturer. Naturally the manufacturer makes a lot of money through the sale of the car (and right now they are struggling to sell them) so they have an extra incentive you approve your application. If you go through a separate finance company they will have much less incentive, so you might find it harder to get approved…

It depends on what you can afford

Your credit might be outstanding but if you have no income and no savings you won’t be able to afford the repayments. Most lenders will want some information about what you earn and if you can prove a strong income you might get away with a less than perfect credit history.

And if you can’t prove a strong income…

Well if you can’t afford the repayments then you shouldn’t take the loan anyway. If you have only recently gotten a new job for instance it can be tempting to rush straight out and buy a new car, but if your credit isn’t that strong you might find you need to wait for a few months first.