What credit score do I need for a car loan?
Published Sun, Sep 9, 2012 Updated Tue, Feb 16, 2021
Getting credit for a car is generally not as difficult as say getting a mortgage, but how difficult will of course depend on your credit rating and your income and to an extent who you look to buy the car from.
If you have good credit, which would generally be anything over 880 for Experian or 400 for Equifax, then you shouldn’t have any problem at all getting credit provided you have sufficient income to be able to pay the loan back with.
If your credit isn’t so good though you should still be able to get credit, but you might have to shop around, you will probably need a bigger deposit and you will certainly have to pay a higher interest rate.[cta]
New vs used
If you buy a new or nearly new car from a main dealer you might actually be getting the credit from (or at least through) the manufacturer, this often makes getting credit easier as they obviously want to sell the car.
Of course new cars are much more expensive and chances are you will instead have to buy a used car and apply for credit from a separate credit company – although the dealership where you buy the car may still help with this.
Also, consider an unsecured personal loan from your bank, this will allow you to buy a car privately, which should work out cheaper, and that means you won’t have to borrow as much.
The bottom line
There is no minimum credit score that will or will not get you that car loan, the requirements vary from lender to lender and will depend on the specifics of your credit file. If you have a history of repaying car credit on time then you might be forgiven for having a relatively low overall score (perhaps as the result of a credit card default).[cta]
If you have particularly low credit (on the low side of fair) then you might still have a chance if you speak to a specialist car credit agency. You will probably fail any automatic applications but if you speak to them in person they may sometimes be able to help.
Of course it is worth restating that with a low credit score you are likely to be paying a high interest premium and it might not be worth it.