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What credit score is needed for a car?

Find out what credit score is needed for a car loan and learn how you can improve your chances of getting approved.

Your credit score will be used to determine your eligibility for most car loans. You’ll usually need to have a minimum score of 660 to get approved for financing with decent interest rates. It may be possible to qualify with a lower score, but you’ll usually have to pay higher interest rates, secure your payments against an asset or sign up with a cosigner to get approved.

What credit score is needed for a car loan?

A credit score of 660 is needed for a car loan in Canada if you want to get a decent interest rate. However, it may still be possible to qualify for a car loan with fair or bad credit if you’re willing to pay higher rates. You can apply for your credit score by filling out an application with one of Canada’s two major credit bureaus, Equifax or TransUnion

Understanding what credit score is needed for a car loan

The graphic below outlines the different tiers that your credit score for a car loan can fall into. Any score above 660 is considered to be good or excellent credit. As your score dips below 660, you may find you have to pay higher interest rates or have a harder time qualifying for financing.

What are the credit score tiers and ranges?

There is no single, definitive credit score for an individual – credit scores differ slightly depending on the bureau, which means your Equifax score will probably be slightly different from your TransUnion credit score. While not set in stone, the general credit tiers are:

CACCF Credit Score Range And Ratings

Why is my credit score important to car loan lenders?

Your credit score helps your lender determine how likely you are to pay back your loan on time. Their assessment of your credit score for a car loan affects whether you can qualify for financing and how much interest you’ll pay. Learn more about what interest rates you might have to pay based on what credit score is needed for a car loan in the table below.

Likelihood of approval by credit score

Credit scoreEligibility for loansInterest rates
Scores below 500You may have trouble qualifying for a car loan if your credit score is below 500. If you do manage to get approved, you’ll likely have to pay very high interest ratesCan be anywhere from 20% to 47%.
Scores from 500 to 660Having a poor to fair credit score indicates to lenders that you’re more likely to default on your loan. You should be able to qualify with scores in this range, but you’ll pay higher interest rates.Can be anywhere from 10% to 35%
Scores above 660A score of 660 is usually the credit score needed for a car loan. This score should get you approved for most types of financing with lower interest rates.Can be anywhere from 0% to 10%

Minimum credit score for a car loan in Canada

The minimum credit score for a car loan in Canada will depend on which lender you go with. For example, one lender may require you to have a minimum score of 650 to qualify while another could approve your application with a score of 550. It all depends on the level of risk that your lender is willing to take on.

That said, it’s likely that you’ll have difficulty getting approved for a car loan with a credit score below 500 in most cases. The only way you can typically qualify with this level of credit is if you apply with a lender that specializes in bad credit car loans. These loans often require you to pay incredibly high interest rates (above 15%) to qualify.

How does your credit affect your access to car loans?

Your credit score affects 2 different elements of your car loan application:

  • Your ability to get approved. Your credit score will determine whether you qualify for a loan. Most lenders will have a minimum credit score for a car loan in Canada that they’ll require you to meet in order to qualify for financing.
  • The interest rates you’ll pay. You’ll generally get much lower interest rates if your credit score for a car loan sits above 660. You’ll pay higher rates if your score sits below 660 unless you sign up with a cosigner or use an asset to secure your payments.

Car loan options with bad credit

You can pursue the following options to get a car loan with bad credit:

  • Secure your loan with an asset. You may be able to get financing if you use an asset such as your home, jewellery or a vehicle you’ve paid off to secure your repayments. This should bring your interest rates down and help you get approved.
  • Get a cosigner. It may be possible to get a friend or family member with good credit to cosign your car loan with you. Just be aware that the person you ask will be on the hook to make your repayments if you default on your loan.
  • Apply for a bad credit car loan. Some lenders specialize in offering bad credit car loans to people who can’t meet the eligibility requirements for traditional loans. The issue with these loans is that they often come with extremely high interest rates.

How to improve your chances of getting approved

Use these tips to qualify for lower rates and get approved for your next car loan:
Make payments on time. Pay your bills on time to avoid late fees and bad marks on your credit report. Any late payments you make will drag down your score.

  • Mix up your credit types. Take out a variety of credit types if possible (such as credit cards, mortgages and loans) to diversify your debt portfolio.
  • Try not to apply for too much credit. Avoid applying for too much credit since doing so will result in hard inquiries on your file (which can lower your credit score).
  • Avoid new debt. Avoid taking out new loans or credit cards wherever possible since these debts are seen as “immature” and can bring down your credit score.
  • Correct errors in your credit report. Correct mistakes or errors on your credit report with one of Canada’s major credit bureaus to make sure you get the right score.
  • Consolidate debt. Consolidate your debt into one easy payment to qualify for lower rates and make sure you have a good handle on the money you owe.

Compare car loans

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements Table description
Loans Canada Car Loans
$500
0% - 29.99%
3 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
AutoLoanProviders
$7,500
3.99% - 29.99%
12 - 96 months
300
Min. income of $1,800 /month, 1+ months employed
Available in Ontario only.
Browse thousands of available vehicles and apply online from the comfort of your own home. Receive confirmation of your financing options and get your new vehicle delivered to your door anywhere in Ontario free of charge. All credit scores considered.
CarsFast Car Loans
$500
4.90% - 29.90%
12 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Coast Capital Car Loan
$10,000
Varies
18 - 84 months
650
Able to service debt payment of $300/month
Finance or lease both new and used vehicles with competitive rates and flexible terms from one of Canada's largest credit unions. No credit union membership required for this product.
Splash Auto Finance
$10,000
9.9% - 29.9%
24 - 84 months
N/A
Min. income of $2,200 /month, 3+ months employed
Splash Auto Finance provides auto loans to borrowers with fair credit, bad credit, no credit or bankruptcy. Get financing for a new or used car.
LoanConnect Car Loans
$500
9.90% - 46.96%
3 - 120 months
550
No min. income requirement
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
Canada Auto Finance
$500
4.90% - 29.95%
3 - 96 months
300
Min. income of $1,500 /month, 3+ months employed
Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
$500
1.90% - 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
Fairstone Secured Personal Loan
$5,000
19.99% - 23.99%
36 - 120 months
560
Established credit history and own your home
Fairstone offers secured personal loans up to $50,000.
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Compare up to 4 providers

Bottom line

The usual credit score needed for a car loan is 660 or above. However, you may be able to qualify for a car loan with a lower score if you’re willing to pay higher interest rates. If you’re having trouble qualifying for a car loan with bad credit, you may want to improve your chances of getting approved by securing your loan with an asset or signing up with a cosigner. You can learn more about how car loans work in our comprehensive guide here.

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