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What credit score do you need to have for a car loan?
Is there a specific credit score that I need for a car loan? My credit isn’t great right now, but I really need a car.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Your credit score is important when looking for a
car loan
, so it’s great you are asking questions now. While there’s no minimum credit score for taking out a car loan, most lenders will look for a credit score of 660 or higher. It becomes more difficult to find a loan with a credit score of 500 or below.If you have a low credit score, however, don’t worry! You’ll likely see a higher interest rate on most loans, but you will still have options. To secure a better interest rate on a car loan, try one or more of these:
- Find a cosigner. If you can find someone with excellent credit to cosign your loan, you’ll qualify for much better terms.
- Make a large downpayment. Many lenders will lower your APR if you can make a large downpayment on your loan.
- Choose the right lender. Some lenders work specifically with borrowers with low or limited credit. Shopping around with these lenders gives you a better chance of approval for a loan.
- Borrow from a credit union. Credit unions are known for their flexible rates and high approval statistics.
Even if your new car loan doesn’t have the best terms or interest rate, you can always refinance in the future. No matter what your credit score is,
Jerry
makes refinancing easy by comparing quotes from multiple lenders to find the best rate. View full answer
- Gregory R.
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