What's Length of Credit History?
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What's a Good Credit Score to Buy a Car?
4 min read
Published January 24, 2025
Key Takeaways
- Your credit score helps determine your auto loan eligibility and interest rates.
- While no minimum credit score is necessary for buying a car, nearly 82% of car loans in the first quarter of 2026 went to people with scores over 661, according to Experian®.
- You may influence your credit score by paying down your balance to reduce your credit utilization.
Buying a car is a major financial decision. Unless you have the cash to purchase a vehicle outright, you typically have to rely on a car loan for financing your vehicle. Lenders check your credit history, including credit cards, mortgages, and other loans, to decide whether you qualify for an auto loan and your interest rate. That doesn’t mean you have to have perfect credit to purchase a car. However, understanding your credit score’s impact on the car-buying process could help you make the most informed decisions.
Is there a minimum credit score needed to buy a car?
Every lender has their own standards and approval guidelines for car loans. There’s no universal minimum credit score required for purchasing a car. However, credit scores play a central role in the car-buying process. Your credit history offers lenders insight into your typical financial habits. A high credit score may show that you manage debts responsibly by paying bills on time each month and retaining a low balance. A poor credit score, on the other hand, may raise concerns about your ability to stay on top of payments.
Auto lenders typically assess your credit score and other financial information when evaluating your auto loan application. Your credit score helps lenders determine your interest rate, down payment, and other loan terms.
What credit score is needed to buy a car?
You don’t need a specific credit score in order to buy a car. Every situation is different. However, Experian® gathered data on auto loans and credit scores from the first quarter of 2023. The report shows the average credit scores of people financing their vehicle purchases and average interest rates across credit backgrounds. This data offers valuable insights for people planning to buy a car.
According to Experian®, people with good or excellent credit made up the highest percentage of auto loan borrowers. Around 82% had a credit score of at least 661 for new car loans. Lower credit scores didn’t disqualify every borrower, however. Lenders provided auto loans to people with credit scores between 500 and 660, representing 6.35% of new car loans and just over 18% for used car loans.
While it’s not impossible for someone with a very low credit score to buy a car, improving their credit could improve their chances. Scores in the lowest credit category, under 500, accounted for around 3% of all auto loans.
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How credit scores affect car loan interest rates
Not every auto loan you qualify for is necessarily a wise financial decision. Car loan interest rates depend on your credit score.
Experian® reports that the average new car interest rate for a person with a credit score between 661 and 780 (a prime credit score) was 6.23%. However, a loan for someone with a credit score between 501 and 600 (a subprime credit score) could have more than double the interest rate, with an average of 13.44%. People with credit scores below 500 fare even worse, with average interest rates over 16%.
For used cars, interest rates were higher across the board, especially for people with poor credit. A prime borrower received an average interest rate of 8.77% for used cars. The subprime borrower’s average interest rate jumped more than 10 percentage points to 19.42%.
While a bad credit car loan may make it possible for you to purchase a car with a low credit score, it may not be worthwhile. High interest rates mean more expensive monthly payments and a larger bill in the long run.
Stay on top of your credit score before buying a car
Fortunately, if your credit score isn’t as high as you’d like, you could take steps to strengthen it over time. One way to help your score is by reducing your balance. Whenever possible, paying more than the minimum on your credit card bills could lower your credit utilization ratio, which plays a role in calculating your credit score. Responsible credit card use is key to positively affecting your credit score2. Small changes, like paying your bill on time each month and reducing spending, add up to help your credit score, which may help you qualify for better auto loans. Before you start shopping for a car, you may want to check your credit score.
Did you know?
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While you don’t need a specific credit score to qualify for a car loan, your credit plays a significant role in buying a car. Understanding your credit score could help you qualify for the best interest rates and the lowest monthly payments.
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