What Your Credit Score Costs You
On a $30,000 car loan for 60 months, the difference between good and poor credit is massive:
720+ Credit Score
5% APR
580 Credit Score
18% APR
$11,720 Difference
That's almost 40% of the car's value in extra interest
Auto Loan APR Rates by Credit Score
| Credit Tier | Score Range | New Car APR | Used Car APR |
|---|---|---|---|
| Super Prime | 781-850 | 4.5% - 5.5% | 5.5% - 7% |
| Prime | 661-780 | 5.5% - 7.5% | 7% - 9.5% |
| Nonprime | 601-660 | 9% - 13% | 11% - 15% |
| Subprime | 501-600 | 13% - 18% | 16% - 21% |
| Deep Subprime | 300-500 | 18% - 25%+ | 20% - 25%+ |
*Rates vary by lender, loan term, and market conditions. Data based on 2025 averages.
Check Your Credit Before Shopping
Get your credit reports from all three bureaus before visiting any dealership. Scores can vary by 20-50 points between bureaus.
Equifax
equifax.com
Experian
experian.com
TransUnion
transunion.com
Free Option: Get all three reports free at AnnualCreditReport.com. For scores, use Credit Karma or check your bank/credit card app.
Strategies for Your Credit Level
Excellent Credit (720+)
Best rates available
- + Qualify for 0% APR manufacturer offers
- + Shop multiple lenders for best rate
- + Negotiate aggressively on price and rate
- + Get pre-approved to maximize leverage
Good Credit (660-719)
Competitive rates
- + Compare bank, credit union, and dealer rates
- + Consider 10-15% down payment
- + Get pre-approved before shopping
- + May qualify for some promotional rates
Fair Credit (600-659)
Higher rates, still options
- + Make larger down payment (15-20%+)
- + Try credit unions first (more flexible)
- + Consider waiting 3-6 months to improve
- + Get pre-approved to know your rate
Poor Credit (Below 600)
Challenging but possible
- ! Build credit 6-12 months if possible
- ! Find a co-signer with good credit
- ! Make the largest down payment possible
- ! Avoid "buy here, pay here" dealers
How to Improve Your Score Before Buying
If you can wait 3-6 months, these strategies can boost your score 50-100+ points:
Pay down credit card balances
Get utilization below 30% (ideally 10%). This alone can boost your score 20-50 points within a billing cycle.
Make all payments on time
Payment history is 35% of your score. Set up autopay to ensure you never miss a due date.
Dispute credit report errors
Check all three bureaus for mistakes. Incorrect late payments or accounts that aren't yours can be removed.
Keep old accounts open
Don't close old credit cards. Length of credit history matters, even if you don't use them.
Avoid new credit applications
Each application creates a hard inquiry. Don't open new cards before your car loan.
Getting Approved with Bad Credit
Do This
- + Save for a larger down payment
- + Find a creditworthy co-signer
- + Choose a cheaper, reliable car
- + Try credit unions first
- + Bring proof of income and residency
- + Read every document before signing
Avoid This
- - "Buy here, pay here" dealers
- - Loans over 72 months
- - Cars you can't afford even at low rates
- - Dealer pressure and urgency tactics
- - Signing without understanding terms
- - Accepting the first offer you get
Frequently Asked Questions
What is the minimum credit score to buy a car?
There's no absolute minimum. Some subprime lenders approve scores as low as 500, but rates will be 15-25%+. A score of 660+ is needed for reasonable rates, and 720+ for the best rates.
Can I buy a car with a 600 credit score?
Yes, but expect rates of 12-18% APR. Consider a larger down payment, a co-signer, or waiting a few months to improve your score. Even a 50-point improvement can save thousands.
What credit score do I need for 0% financing?
Most 0% APR offers require 720+ credit, though some manufacturers want 750+. These promotions are typically only available on new cars through the manufacturer's financing arm.
Does applying for a car loan hurt my credit?
Multiple auto loan inquiries within 14-45 days count as a single inquiry. Shop around during this window to get the best rate without additional credit damage.
Should I get pre-approved before visiting dealerships?
Yes, always. Pre-approval tells you your exact rate, gives you negotiating leverage, and protects you from dealer rate markup. It counts as just one inquiry during the rate-shopping window.
How fast can I improve my credit score?
Paying down credit card balances can boost your score 20-50 points within one billing cycle. Disputing errors can take 30-45 days. Most strategies take 3-6 months for full impact.
Related Guides & Tools
Auto Loan Calculator
Calculate payments at different rates
Affordability Calculator
How much car can you afford?
Bank vs Dealer Financing
Which option is better for you?
First-Time Buyer Guide
Complete guide for new buyers
Down Payment Guide
How much should you put down?
Browse Deals
See what others are paying
Calculate Your Payment
See exactly how different interest rates affect your monthly payment and total cost.