A good credit score to finance a car is typically 660 or higher. This score generally qualifies you for prime interest rates from most lenders. While it's possible to get a car loan with a lower score, you'll likely face significantly higher interest rates. The higher your score above 660, the better your annual percentage rate (APR) will be.
Credit scores used for auto loans are typically your FICO Auto Score, a specialized version of the standard FICO score that places more weight on your past auto loan history. Lenders use these scores to assess risk. A higher score signals that you're a reliable borrower, which translates to lower costs for you over the life of the loan.
Here’s a breakdown of how different score ranges generally affect your loan terms:
| Credit Score Range (FICO Auto Score) | Rating Tier | Estimated New Car APR (Representative) | Likelihood of Approval |
|---|
| 781 - 850 | Super Prime | 5.61% - 7.03% | Very High |
| 661 - 780 | Prime | 6.88% - 10.34% | High |
| 601 - 660 | Non-Prime | 10.49% - 16.55% | Fair |
| 501 - 600 | Subprime | 16.55% - 20.74% | Low (may require co-signer) |
| 300 - 500 | Deep Subprime | Often not offered by mainstream lenders | Very Low |
Data is representative of Q2 2024 averages from sources like Experian and may vary by lender, loan term, and economic conditions.
If your score is below 660, it's often wise to focus on improving it before applying for a loan. Even a modest improvement, say from 630 to 680, can save you thousands of dollars in interest. You can also consider a larger down payment to improve your loan-to-value ratio, which can help offset a lower credit score.
