Your credit score is one of the biggest factors in getting an auto loan. It determines whether you're approved, what interest rate you'll pay, and how much the car really costs you over time.
Here's a breakdown of what scores lenders typically look for and how to get the best deal.
What Credit Score Do You Need for an Auto Loan?
There's no universal minimum, but here's what most lenders look for. For prime rates and the best terms, you generally need a score of 660 or higher. Scores between 601 and 660 fall into the near-prime category and still qualify at most lenders, but with higher rates. Subprime borrowers (501 to 600) can still get approved, though rates will be significantly higher. Deep subprime (below 500) makes approval difficult, and rates can exceed 20%.
The good news is that auto loans are one of the easier types of credit to qualify for, even with a lower score. Lenders can repossess the car if you stop paying, which lowers their risk.
Auto Loan Rates by Credit Score Tier
Your credit score has a direct impact on your interest rate. Here's roughly what to expect for a new car loan in 2026. Borrowers with scores above 780 can expect rates around 5% to 6%. Scores between 660 and 779 typically see rates from 6% to 9%. Fair credit scores (600 to 659) often mean rates between 10% and 14%. And subprime borrowers (below 600) may face rates of 15% or higher.
On a $25,000 loan over 60 months, the difference between a 6% rate and a 14% rate is roughly $5,500 in extra interest. That's real money.
How to Get the Best Auto Loan Rate
Check your credit score first. Know where you stand before you walk into a dealership. This gives you negotiating power and helps you spot unreasonable offers.
Get pre-approved. Apply for pre-approval from your bank, credit union, or an online lender before shopping for a car. Pre-approval locks in a rate and gives you a benchmark to compare against dealer financing.
Shop multiple lenders. Credit unions often offer lower rates than banks or dealership financing. When you apply to multiple auto lenders within a 14-day window, FICO counts them as a single inquiry.
Make a larger down payment. A bigger down payment reduces the amount you need to borrow and can help offset a lower credit score. Aim for at least 10% to 20% down.
Choose a shorter loan term. While longer terms (72 to 84 months) have lower monthly payments, they come with higher rates and more total interest. A 48 or 60-month term is usually the sweet spot.
What to Do If Your Score Isn't Good Enough Yet
If your credit score would land you a high interest rate, it might be worth waiting a few months to improve it. Even a 30 to 50 point increase can move you into a better rate tier.
Focus on paying down credit utilization by reducing credit card balances, making all payments on time, and disputing any errors on your credit report. The Self Visa® Credit Card adds positive payment history that reports to all three bureaus. The Kikoff Credit Account requires no credit check, so it won't add a hard inquiry while you're preparing to apply for an auto loan. Read our Self review and Kikoff review for details.
A credit builder loan can also help establish positive payment history quickly.
If you need a car now, consider a smaller, less expensive vehicle to keep the loan amount manageable. You can always refinance later once your score improves.
Kikoff Credit Account
Kikoff Credit Account
Everything you need to build your credit, right in one app. Build credit, lower debt, and unlock progress with tools that actually work.
Loan Amount
$750-$3,500 depends on the plan
Term
12 months
APR
0%
Admin Fee
$0
Monthly Fee
$5/month for Basic plan, $20/mo for Premium plan $35/mo for Ultimate plan
Credit Check
No
Average Score Increase
An avg increase of +86 points within a year with on-time payments
The Bottom Line
Your credit score matters a lot when buying a car. A higher score means lower rates and thousands of dollars in savings. If your score isn't where you want it, take time to build it up before applying — your wallet will thank you.
Frequently Asked Questions
Can you get an auto loan with a 500 credit score?
Yes, you can likely get approved, but the terms will be challenging. With a 500 score, you're in the deep subprime category, so expect interest rates of 15% or higher and potentially a requirement for a larger down payment. Some lenders may also require a co-signer with better credit.
Does applying for an auto loan hurt your credit score?
Yes, each application triggers a hard inquiry that temporarily lowers your score by a few points. However, when you apply to multiple lenders within a 14-day window, FICO counts them as a single inquiry. This is why it's important to do your shopping quickly rather than spreading applications over weeks or months.
Should you finance through the dealer or a bank?
It depends on what rates you can get. Always get pre-approval from a bank or credit union first — this gives you a benchmark. If the dealer can beat that rate, great. If not, use your pre-approval to buy the car. Dealer financing can be convenient, but it's often more expensive because dealers mark up the rates.
How can you refinance an auto loan for a better rate?
You can refinance by applying with a different lender — typically after 6 to 12 months of on-time payments, when your credit score ranges have improved. The new lender pays off the original loan, and you get a new loan at a better rate. This can save you hundreds or thousands in interest over the life of the loan. Additionally, dispute errors on your credit report if you find any inaccuracies. Understanding how credit scores are calculated helps you know where to focus your efforts.
