What is the minimum credit score for a car loan?

Buying a new car (or a used one) is a big financial cost and for most people getting some form of a loan is necessary. But if you don’t have a great track record with borrowing money it can be difficult to get credit.

The short answer is that there is no minimum credit score per se, but it goes without saying that the lower your credit score is the harder you will find it to get approved.

Your credit score is just a guideline

What really matters is the contents of your credit history. Potential lenders will look at more than just the number given – in fact the actual number depends on which credit reference agency they use:

Your credit score with Experian will be different than your score with Equifax which will be different than your score with Call Credit…

If you apply for car finance, the lender will want to see what other finance you have had in the past and how well you dealt with paying it. Lenders all have their own criteria and some are more forgiving than others.

Having an income helps too

Another factor to consider is how you will make the payments. If you have no income then you will struggle to get a loan even if your credit is good. If on the other hand you have a strong income you might get away with less than perfect credit.

Generally the smaller the repayments would be, compared to your net monthly income (minus any other debt repayments) the lower your credit score can be before you’ll be refused credit.

How secure that income is also matters, so if you have just started a new job you should consider waiting at least a couple of months. If you have been at the same job for a year or more and you are borrowing a relatively small amount you probably have a good chance even if your credit is only fair.

In summary

The minimum score required is impossible to say for certain, but if you can prove you have the income right now, you might find finance is easier to get than you thought. Even with a ‘poor’ credit score (that’s anywhere between 561 and 720 according to Experian) it may be possible to borrow a small amount.

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