{"id":356701,"date":"2021-02-24T07:00:38","date_gmt":"2021-02-24T14:00:38","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=356701"},"modified":"2021-02-24T11:41:57","modified_gmt":"2021-02-24T18:41:57","slug":"credit-score-affects-auto-loans","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/credit-score\/credit-score-affects-auto-loans\/","title":{"rendered":"What credit score do you need for a car loan?"},"content":{"rendered":"\n
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Disclosure regarding our editorial content standards.<\/a><\/p>\n\n\n\n

Buying a car is an exciting investment, but it can come with some challenges, including being approved for a loan and securing a reasonable interest rate. If you\u2019re ready for your next car, you may be worried about what you need when it comes to your credit score for a car loan.<\/p>\n\n\n\n

In the second quarter of 2020, the average credit scores on car auto loans were 718 (new cars) and 657 (used cars) according to the Experian Automotive Industry Insights Report.<\/a> So, does your score have to be 650 or higher to get approved for an auto loan?<\/p>\n\n\n\n

Well, not exactly. In reality, there isn\u2019t a set minimum score you need to get a car loan because your approval actually depends on a lot of factors. Additionally, many auto lenders want to give you a loan, even if you have bad credit.<\/a> They just might give you a loan with steep lending conditions. Keep reading for a complete breakdown of how your credit score and other financial factors can impact your auto loan.\u00a0<\/p>\n\n\n\n

How will my credit score affect my car loan?<\/h2>\n\n\n\n

In 2019, the average car loan APR (annual percentage rate) was 8.06 percent.<\/a> However, borrowers with strong credit saw an average of 5.66 percent, and borrowers with poor credit maintained an average APR of 21.54 percent. Clearly, your credit score directly impacts the interest rate you\u2019ll receive on your car loan.<\/p>\n\n\n\n

Ultimately, your credit score affects whether you get approved and what loan terms you\u2019ll receive. That\u2019s because your credit score is a representation of your financial habits. A high credit score<\/a> indicates that you\u2019re a reliable person who pays back their debts on time. <\/p>\n\n\n\n

In contrast, a low credit score shows that you have trouble paying back lenders. As a result, lenders give out higher interest rates to applicants with low credit scores so they can protect themselves.\u00a0<\/p>\n\n\n\n

What credit score is considered good for a car loan?<\/h2>\n\n\n\n

You can often get a car loan with poor credit. However, the interest rate on that car loan<\/a> may be extremely high. Typically, the best rates and easiest approvals go to individuals with a credit score of 750 or higher.\u00a0<\/p>\n\n\n\n

If your credit score is below 650, it\u2019s considered a \u201cbad score,\u201d and you can expect you\u2019ll have to walk through the negative items on your report and explain them. <\/p>\n\n\n\n

Interest rates for new car auto loans<\/h3>\n\n\n\n

On average, you can expect to see the following interest rates for new cars:<\/a><\/p>\n\n\n\n