What Credit Score Do You Need to Buy a Car in 2020?
Credit scores are manageable, we will teach you simple keys to changing you credit score for a car loan from poor to good.
Rather than asking, "What credit score do you need to buy a car?" it's a better idea to ask, "What credit score do you need to get a good deal on an auto loan?"
It's always in a dealership’s advantage to sell you a car, so the salespeople are going to do everything to secure financing for you, even if your credit isn't high. If your credit is not high, your rate will be!
Typically, a credit score of 700 or higher will put you in a good position to find favorable auto loan terms. If your credit score is lower, you'll likely be offered a higher interest rate. And the lower it is, the more you're likely to pay. If your credit score is very poor—less than 450—then you may not be able to get a car loan.
Besides your credit score, lenders will consider your income, how much you have for a down payment, and the size of the loan you’re seeking.
U.S. News & World Report broke down average auto loan interest rates in 2020 by score:
Excellent Credit (750+)
The average auto loan interest rate for people with an excellent credit score of 750 or higher is 4.98% for a new car and 5.23% for a used car.
Good Credit (700–749)
People with good credit scores of 700–749 average an interest rate of 5.07% for a new car and 5.32% for a used car.
Fair Credit (650–699)
The average car loan interest rate for people with a fair credit score of 650–699 is 11.69% for a new car and 11.94% for a used car.
Poor Credit (450–649)
Subprime borrowers are those people with poor credit scores of 450–649, average an interest rate of 17.08% for a new car, and 17.33% for a used car.
Very Bad Credit (449 or less)
People with what's considered very bad credit—also called deep subprime borrowers—are not always approved for a car loan. Those borrowers that are approved will pay very high-interest rates, an average of 18% for a new car, and 18.25% for a used car.1
Where ever your credit score lands, we can help you improve to get the best rate your credit affords on your new automotive purchase.