Because approval for a car loan varies from lender to lender, there’s no way of definitely saying what the minimum credit score is for a car loan. A 575 credit score, however, puts you in the, meaning that you likely will have a higher interest rate than what would make for a wise financial decision.
Then again, if the car is a necessity, you might have to succumb to the rates and refinance the car at a later date.
With a 575 credit score, your approval isn’t guaranteed, but if you have strong income and a decent debt-to-income ratio, you might still qualify. In the meantime, you should work to try to pay off any debt or delinquent accounts on your credit report. If you do so, you can effectively lower your interest rates in the future.
A 575 credit score gets you an average car loan interest rate of 11.03% for new cars and 17.11% for used cars. Because the interest rates are so high, building credit might be the better option here, but you’ll have to make that decision on your own.
Remember that even if you get approved, you still need to budget for other aspects of car ownership, including gas, maintenance, and car insurance. To get the best rate for your car insurance needs, let Jerry do the heavy lifting. Jerry compares competitive quotes from more than 50 top providers, including Nationwide, Allstate, and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!
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