UPDATED: October 01, 2022

After years of hard work, you feel you’re ready to buy a car. Unfortunately, your past financial mistakes are hunting you with a credit score of 600.

Can you get a car loan with a 600 credit score? The short answer is yes, but there are also other factors that lenders consider when approving your auto loan.

If you’re worried that your credit score will be a hindrance to getting the car that you need or dream of, you’ve come to the right place.

In this article, we’ll help you understand what you need to prepare for and how you can boost your credit score before applying for an auto loan.

We’ve gathered the best tips and guidance from finance experts and online sources. We’ve also checked the official sites of auto loan providers and their requirements.

So, keep reading and don’t miss out on the crucial steps toward getting an auto loan with a 600 credit score. Below, we share a unique tip for improving your credit score so you wouldn’t have to apply for an auto loan haphazardly.

What credit score do you need for an auto loan?

There’s no fixed credit score that auto lenders use for a car loan because they use different scoring models to assess your creditworthiness.

But is 600 a good credit score for an auto loan?

If the lender is using FICO, 600 falls in the Fair score range, but if they use VantageScore, it’s within the Poor score range.

Here’s the comparison:

FICO scoreRatingVantageScoreRating
800 – 850Exceptional781 – 850Excellent
740 – 799Very Good661 – 780Good
670 – 739Good601 – 660Fair
580 – 669Fair500 – 600Poor
300 – 579Poor300 – 499Very Poor

Regardless of which credit score model the lenders use, it’s better to have a credit score above 600. That will give you access to more competitive and affordable auto loans and increase your odds of getting approved.

What’s the average auto loan rate for a 600 credit score?

If your credit score is 600, it’s considered subprime. The average APR (annual percentage rate) is 9.75% for a new car and 16.85% for a used car.

Here’s a summary table from Experian Information Solutions:

Credit scoreAverage APR – new carAverage APR – used car
Superprime: 781-8502.96%.3.68%.
Prime: 661-7804.03%.5.53%.
Nonprime: 601-6606.57%.10.33%.
Subprime: 501-6009.75%.16.85%.
Deep subprime: 300-50012.84%.20.43%.

As you can see, a better credit score means lower interest rates. If you can improve your 600 credit score even with just a few points, you can save a lot of money. Here’s a car loan calculator you can use to check how much your monthly payment would be.

What do lenders consider when you apply for an auto loan?

Auto loan providers consider two biggest factors when you borrow: your income and credit score.

Your income indicates how much car you can afford to buy, while your credit score suggests your creditworthiness. Generally, you can qualify for an auto loan if you earn at least $1,500 monthly.

If your credit score is low, you’re a high-risk borrower because you’re more likely to miss payments and default on your loan.

In addition, you’ll need to provide documentation to support your application. Here are some requirements:

  • Pay stub to show your employment and income
  • Tax returns
  • Driver’s license
  • Proof of residency (i.e., utility bill)

How can you increase your chances of getting a car loan with a 600 credit score?

Even with a low credit score, you can still get approved for an auto loan, albeit with high interest. To increase your odds of getting approved for a better loan rate, there are a couple of things you can do.

1. Provide a bigger down payment

You can find loans that don’t require a down payment but expect them to be expensive. If you shell out a bigger down payment, you can lower your car loan amortization.

Ideally, you should pay a down payment of at least 20% of the car loan value. However, that’s a steep price for most borrowers. If you can’t afford it, you shouldn’t drain your savings either. You can aim for 10% instead.

Providing a down payment demonstrates your ability to pay for the car. It also gives the lender a return upfront in case your car loan payments go south later on.

2. Get an auto loan co-signer

You can increase your chances of improving your car loan terms if you have a cosigner. This can be your spouse, friend, or relative who has a better credit score than you.

A co-signer will be legally responsible for paying your loan if you can’t make payments, assuring the lenders that your auto loan is covered.

That puts your co-signer at risk, so make sure they know the details.

3. Provide proof of financial stability

The problem with credit scores is that the financial mistakes you made seven years ago can still affect your rating. In reality, though, your situation might have changed significantly in recent years, so you can afford to get a car now.

If that’s not apparent in your credit score, you can bring documents showing your financial stability. Lenders who will see that you have a solid source of income will consider you less risky and give you a lower loan rate.

You can show them your latest pay stubs and employment history documentation. If you have a side hustle, you can also show bank statements or financial transactions to prove that you earn more.

How to improve your credit score before applying for an auto loan

If the car loan rates are too steep for you, it’s better to delay your purchase and improve your credit first. Here are some ways you can boost your credit score:

1. Have a healthy credit mix

Use a mix of credit, such as credit cards, personal loans, secured cards, and mortgages. Your credit mix accounts for 10% of your credit score and demonstrates your responsibility for handling different types of debts.

If you only have a credit card, you may consider getting a secured card or a credit-builder loan.

2. Pay off some of your debts

It’s important to reduce your credit utilization to 30% and below, which accounts for 30% of your credit score. It’s the second-biggest factor that affects your credit.

If you can pay off some of your debts, you can keep your outstanding balance low. The lower, the better, but don’t bring it down to 0%. To give you an idea, those with high credit scores keep their credit utilization at around 7%.

As soon as your low balance is reported to the credit bureaus, you can see an immediate boost to your credit score.

3. Request for a higher credit limit

Another way to reduce your credit utilization ratio is to ask for higher credit limits on your credit cards. If your income has increased or you’ve built a long credit history, your odds of getting approved are high.

However, remember that you shouldn’t use that extra limit you got. You still need to keep your credit utilization below 30%.

It’s also important to ask your credit card provider if it’s possible to avoid a hard pull on your credit with this increase in limit request. Otherwise, you can expect a temporary dip in your score, which will go back once the higher limit is reflected on your credit reports.

4. Pay your bills on time

There’s no better way to increase your credit score significantly than by showing a good history of on-time payments. It’s the most important factor in calculating your credit score, accounting for 35%.

You have to make sure that you don’t miss any payments for more than 30 days; otherwise, they will be reported to the credit bureaus and remain on your record for up to seven years.

Setting up an alarm on your phone to remind you of your due dates or automating your payments can help you keep up with the deadlines.

Pro Tip: Sign-up withExperian Boost so you can benefit from your on-time payments on other bills like your Netflix subscriptions, rent, and phone. These aren’t normally reported to the credit bureaus, yet they impact your finances monthly. What’s more, Experian Boost is free and would only report positive payments on these accounts.

5. Be an authorized user

You can also increase your 600 credit score by becoming an authorized user of someone’s credit card with a good on-time payment history. It’s called credit piggybacking.

You can ask a friend or relative to add you as an authorized user so their credit card payments will reflect on your credit report. They don’t have to let you use their card literally; they just have to add your name as an authorized user.

6. Keep your old accounts open

While we told you to pay off as much debt as you want, it helps to keep your older accounts open even when you no longer use them. The age of your credit history also matters in calculating your credit score.

Removing some of your accounts will mean that all their information will also disappear from your credit report. It will reduce the length of your credit history and pull your credit score down. It will also lower your credit limit, consequently affecting your credit utilization ratio.

What you can do is ask your credit providers to waive your annual fees so you don’t accumulate any extra expenses by keeping them open.

7. Request to remove negative items on your report

If you have accounts in collections, you have to deal with them. You can contact your creditor to reach a payment agreement that works for you.

If you’ve paid off the debt, it may still appear on your credit report, affecting your credit score. You can call your creditor and request the removal of the account since you’ve already paid it.

It’s not guaranteed, but if you explain your case more carefully and appeal to their goodwill, they might grant your request.

8. Review and monitor your credit reports

When you’re building your credit, reviewing your reports can help. Inaccurate and missing information can impact your score, so you must rectify them immediately.

If you see incorrect entries, like the wrong status of accounts, purchases you didn’t make, and debts that aren’t yours, make sure you dispute them. You can dispute them directly with the company or the three credit bureaus: Experian, Equifax, and TransUnion.

Wrapping Up

Can you get an auto loan with a 600 credit score? Definitely, but it will be more expensive than the deals that high scorers receive.

Still, you can do something to increase your access to better offers, such as paying a bigger down payment, showing proof of financial stability, and having a co-signer.

If you still can’t find a rate that works for you, it’s better to work on building your credit first. You can follow our tips above, adopt a behavior of creditworthiness, and see your credit score improve soon enough.