Quick answer
There's no single minimum credit score for a car loan, but a score of 661 or higher typically gets reasonable rates and 750+ gets the best ones. Borrowers below 600 can often still get approved, but at much higher APRs that can add thousands in interest.
Buying a car is the second-largest purchase most Americans make. And your credit score determines whether you'll pay $2,000 or $12,000+ in interest over the life of your auto loan. Here's everything you need to know about credit scores and car buying in 2026.
Minimum Credit Scores for Auto Loans
There's no single minimum — different lenders have different requirements:
| Credit Score Range | Rating | Approval Odds | Typical APR (New Car) |
|---|---|---|---|
| 750–850 | Excellent | Easily approved, best terms | 4.5%–6.0% |
| 700–749 | Good | Easily approved | 6.0%–8.5% |
| 650–699 | Fair | Usually approved | 8.5%–12.0% |
| 600–649 | Below average | Approved with higher rates | 12.0%–16.0% |
| 500–599 | Poor | Subprime lenders, very high rates | 16.0%–22.0% |
| Below 500 | Very poor | Difficult, may need large down payment | 22.0%+ or declined |
How Your Credit Score Affects the Total Cost
Let's compare the total cost of a $35,000 car loan over 60 months at different credit score tiers:
| Credit Score | APR | Monthly Payment | Total Interest Paid | Total Cost |
|---|---|---|---|---|
| 750+ (Excellent) | 5.0% | $661 | $4,637 | $39,637 |
| 700 (Good) | 7.5% | $702 | $7,086 | $42,086 |
| 650 (Fair) | 11.0% | $762 | $10,696 | $45,696 |
| 600 (Below avg) | 15.0% | $833 | $14,956 | $49,956 |
| 550 (Poor) | 19.0% | $907 | $19,434 | $54,434 |
The difference between excellent and poor credit on the same car: $14,797 in extra interest. That's enough to buy a second used car.
New Car vs. Used Car Loan Rates
Used car loans typically carry rates 1–3% higher than new car loans because used cars depreciate faster and carry more risk for the lender. A 7% rate on a new car might be 9–10% on a used car for the same borrower.
How to Get the Best Auto Loan Rate
- Check your credit score first. Know where you stand before walking into a dealership. AnnualCreditReport.com provides free reports.
- Get pre-approved before shopping. Apply with your bank, credit union, or online lender before visiting dealers. This gives you a baseline rate to compare. Credit unions often offer the best auto loan rates — sometimes 1–2% below banks.
- Shop multiple lenders within 14 days. Multiple auto loan inquiries within a 14-day window count as a single hard inquiry on your credit report. Compare at least 3 offers.
- Make a larger down payment. Putting 15–20% down reduces your loan-to-value ratio, which can lower your rate by 0.5–1%.
- Choose a shorter loan term. 36–48 month loans get lower rates than 60–72 month loans. Yes, the payment is higher, but you pay far less interest.
- Don't focus only on monthly payment. Dealers often extend loan terms to lower monthly payments — but you end up paying thousands more in interest. Focus on total cost.
- Negotiate the car price first, then financing. Don't let the dealer mix up the price negotiation with the financing discussion. Settle on the price, then compare their financing with your pre-approval.
Can't Wait? How to Boost Your Score Fast
If your score is below 700 and you can wait 3–6 months before buying:
- Pay down credit card balances below 30% utilization — this alone can boost your score 20–50 points
- Dispute any errors on your credit report — errors are more common than you think
- Don't close old credit accounts — length of credit history matters
- Become an authorized user on a family member's old, low-balance credit card
Read our complete guide on how to improve your credit score fast for detailed strategies.
Know Your Total Car Budget
Before buying, check how much car you can truly afford. Our guide on how much car you can afford breaks down the 20/4/10 rule. And use the Debt Payoff Calculator to see how different loan terms affect your payoff timeline.
Frequently Asked Questions
How much does credit score affect a car loan?
On a $35,000, 60-month loan, the difference between excellent and poor credit can mean thousands to over $10,000 in extra interest.
Are used car loan rates higher than new car rates?
Yes, typically 1–3 percentage points higher, because used cars depreciate faster and carry more risk for lenders.
Should I get pre-approved before going to a dealership?
Yes. A pre-approval from a bank or credit union gives you a rate to compare against dealer financing and strengthens your negotiating position.
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Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Figures are estimates based on publicly available data at the time of writing. Consult a qualified professional about your situation.