What Credit Score Do You Need To Get A Car Loan?

There are a number of major purchases in life that require more than just a simple payment at checkout. One of these is purchasing a vehicle of any kind. 

Unless you are using all cash you will need to get approved for a car loan and make payments over a number of years. But getting approved for a loan is not always a cut and dry process, especially if your credit isn’t perfect. There are a number of factors that banks and dealerships look for when they are considering issuing you a loan. One of these factors, and probably the most important one, is your credit score.

So is there a credit score that is the cutoff for whether or not you will be approved for a loan? Not really. It all depends on your credit report and the individual lender. But there is a cutoff between good and bad credit that is widely accepted by lenders and is a good indication of whether or not you will have trouble getting approved.

What Credit Score Is Considered Good?

When you are applying for a vehicle loan a credit score of over 750 is considered good and will allow you to breeze through the process with a lower APR. Those with strong credit on average see an APR of 5.49%, lower than the overall average of 9.46% according to data collected by Lending Tree for 2021 Car Payments.

If you have strong credit you will get through the loan process faster and pay a lot less interest year over year. So obviously the higher your score, the better.

What Credit Score Is Considered Bad?

If your credit score is under 650 it is considered bad and you will see that reflected in the hoops you may have to jump through to get approved. The lower your score is under 650 the more likely you will have to walk lenders through the negative items on your credit report and provide explanations. It all depends on the individual lender.

Also the lower your score the higher your APR. People on the very bottom that are approved for loans can see as high as a 22.66% APR, which is enormous.

Fixing your credit can be as simple as making a call! We're here to help you rebuild and understand your credit. Give us a call to get started or learn more about what we can do for you 1-800-431-0449.