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What credit score do I need to buy a car?

A low score won’t necessarily bar you from a loan. But higher scores can land you stronger rates and terms.

You’ve narrowed down the make and model, and now you need financing to drive your car off the lot.

You might wonder how much a role your credit score plays in the financing you ultimately get. But it’s not so much that a low score will keep you from qualifying. Even those with poor credit can find a subprime lender willing to extend financing.

Instead, like it is with most loans, the more solid your credit score, the better your rates and terms you’ll be offered.

What is a good credit score to buy a car?

Generally speaking, the “right” credit score depends on the lender you’re interested in. However, many car loan lenders consider a credit score of 630 to be the threshold for potential approval.

You may qualify for an auto loan with a lower score, though your lender may extend higher interest rates or weaker terms for your loan.

Is there a minimum credit score for a car loan?

No, there’s no concrete minimum credit score for buying a car. In fact, even people with scores of 500 or less can qualify for auto financing with select lenders — especially if that lender specializes in lending to those with poor credit. Lower scores, however, typically result in higher interest rates.

Big-name lenders may enforce minimum credit score requirements that could keep you from qualifying with a low score. If you have an account with a local bank or credit union, start there to learn more about credit requirements. Your previous relationship with them may help you qualify.

Compare car loan providers

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements Table description
Loans Canada Car Loans
$500
0% to 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% to 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% to 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.
Canadian Auto News
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Car Loans Canada
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
LoanConnect Car Loans
$500
9.90% to 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% to 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% to 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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How does my credit rating affect my interest rate?

A low credit score won’t necessarily keep you from qualifying for an auto loan. But you can count on higher interest rates if you don’t have a strong score.

Credit scores of 659 or lower can result in loans with interest rates of 11% or more.

Whereas people with excellent credit scores tend to get the best offers, sometimes qualifying for auto loans at 0% interest.

Here are some rates you could expect on both a new and used car loan for all of the different credit ratings, according to Experian:

Credit ratingCredit scoreAverage new car loan interest rateAverage used car loan interest rate
Poor579 and below14.39%20.45%
Fair580-6597.65% – 11.92%11.26% – 17.74%
Good660-7194.68%6.04%
Very good720+3.65%4.29%

Must read: Should I get preapproved for a car loan?

To avoid surprises at the financing counter, you may want to look into preapproval. Among the hardest parts of buying a car is negotiating a strong deal that your budget can support.

A preapproval can save you the hassle of negotiating an interest rate, allowing you to focus on the actual price of the car instead. With a preapproval, your lender conducts a soft pull of your credit report to determine a probable rate and loan amount you’d qualify for.

Getting preapproved for a car loan allows you to walk into the dealership with a budget lined up. Generally, you’ll want to look for a car priced at about 90% of your preapproved loan amount. Set aside around 10% for taxes and fees.

What if I’m offered a poor interest rate on my auto loan because of my score?

High interest rates don’t have to keep you from taking on a loan. You might be able to consider refinancing your auto loan after a year or so of consistent, on-time payments. Refinancing pays off the balance on your original loan with a new loan, ideally leaving you with lower payments or a shorter repayment term.

With responsible repayments, you might see an increase in your credit score, which can mean stronger terms on a new loan. If you’re quoted refinancing at similar rates or terms to your original loan, consider waiting to refinance until your credit score improves further.

Have bad credit and need a car loan? These are your options

Case study: Roberta uses a secured card to save time and money on her car loan.

Roberta didn’t have the best credit score when she initially took on her auto loan, and she isn’t happy with carrying its high interest rate to the end of the loan’s term. But she knows she needs a stronger credit score before she can refinance at a lower rate.

On-time loan payments contribute to an overall improvement of her score. To speed along the process, she also signs up for a secured credit card. She uses the card minimally to keep her credit utilization rate down, paying down each of her monthly statements on time and in full.

After about a year of responsible spending and repayments, she sees an uptick in her credit score. Soon after, she’s able to refinance her auto loan at a better interest rate, shaving $100 off her monthly payments and 6 months off her overall term.

What can I do to improve my score before shopping for a car?

There’s no quick fix to improving your credit score. Rather, it takes time and a commitment with the help of a few tips:

  • Get a secured credit card. These cards require a cash deposit that typically becomes your credit limit. Because your spending is secured by your deposit, you can focus on building or rebuilding your score with on-time payments.
  • Look into rent-reporting services. Services like RentReporters or RentTrack report your bill and rent payments to the credit bureaus for a fee. It won’t always increase your score, but consistent on-time payment could be enough to land a solid loan rate.
  • Work on paying off your balances. Commit to on-time payments for your utility and cable bills, and pay more than the minimum on your credit card to eventually do away with debt.
  • Ask to be an authorized user. Ask a trusted loved one if they’re willing to add you to their credit card. With responsible spending, you can build your credit history without having to be approved on your own.

Get your credit score

Name Product Starting Price Price Per Month Credit Scores Credit Monitoring Credit Reports Update Frequency
MyMarble
$0
$0 - $29.99
TransUnion
Yes
TransUnion
Monthly
MyMarble’s AI technology gives you real-time recommendations to improve your finances. Get actionable steps to improve your finances by paying down your debt faster, adjust your budget and build your credit score. See results in just 30-45 days.
Mogo Credit Score
$0
$0
Equifax
Yes
Equifax
Monthly
Open a MogoAccount and access your credit score for free with no impact to your score. Receive your updated Equifax credit score every month.
OFFER
Credit Verify Credit Score
$1 for 7 day trial
$29.95
TransUnion
Yes
TransUnion
Monthly
Instantly access your credit score and report online and get daily alerts and updates. Plus, premium members get $25 in bonus rewards every month which can be used towards discounts on everything from shopping and entertainment to dining and travel.
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Repair your credit

Name Product Price Per Month Credit Scores Credit Monitoring Credit Reports Update Frequency
MyMarble
$0 - $29.99
TransUnion
Yes
TransUnion
Monthly
MyMarble’s AI technology gives you real-time recommendations to improve your finances. Get actionable steps to improve your finances by paying down your debt faster, adjust your budget and build your credit score. See results in just 30-45 days.
Credit Building by KOHO
$7
Equifax
Yes
Equifax
Monthly
For a small monthly fee, KOHO will deposit a nominal sum of cash into your account. For six months, KOHO withdraws a portion of the deposited cash. It reports the withdrawal as a repayment to a major Canadian credit bureau, thereby helping you build and improve your credit score.
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Bottom line

Your creditworthiness is important to getting the best rates on a loan, but you can still qualify for an auto loan without an excellent credit score. However, lower scores tend to result in higher interest rates.

If you take on a loan with a high interest rate, you may be able to refinance it later when your score improves, ideally with a lower interest rate or monthly payment.

Compare your options and learn more about financing in our comprehensive guide to car loans. And learn more about credit scores in our other guide.

Compare car loans

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