Men signing car loan agreement

Can I Get a Car Loan with a Credit Score of 600?

Filife team

    Having a good credit score makes it easier for people to get loans or financing. In car loans, having a score credit of 700 or above makes it more likely to get approved. But, if you only have a 600 credit score or less, there are still ways for you to get car financing. 

    Read this article to find alternative ways and techniques for someone with a low credit rating to get a car loan application approved. These options might be your best chance to get your loan application approved.

    How to Get a Car Loan with a 600 Credit Score?

    People with a high credit score are more likely to get an auto loan. Also, they usually qualify for competitive interest rates. For customers with a credit score of 600 or less, getting an auto loan requires more work. They have to look for a dealership that allows for special financing, so their application is approved.

    Needless to say, we must all try to attain a good credit rating. But achieving such is easier said than done. For individuals with a low credit score, do not worry because there are ways for individuals like you to get an auto loan still. The critical thing here is to find the right dealers who are willing to help you achieve what you want.

    Some dealers would still give people a 600 credit score or lower an auto loan as long as they meet the following requirements. Be sure that you can provide these requirements before going to a finance office. Having them with you will surely save a lot of time when applying for car loans.

    1. A verifiable income of at least $1,500 to $2,000 a month ( Before Taxes)

    Clients must provide proof that they have sufficient income in lieu of a good credit rating. Specifically, clients must provide their most recent paycheck stubs (in the last month). The ideal salary to show an ability to afford a vehicle loan is at least $1,500 to $2,000 a month. Having a higher wage increases your chance of getting your loan approved.

    Meanwhile, they need to submit their tax returns from the past two years for those with a guaranteed fixed income. Self-employed individuals have to submit the same. Lenders have to verify that the applicant has sufficient financial capability to pay for the loan he is taking. These are essential in proving that the client has adequate money to pay for his dream vehicle.

    2. Proof of full-time employment or a guaranteed fixed income

    To prove employment or a guaranteed fixed income, clients can submit their tax return copies. Note that most lenders would likely approve applicants who have held their current jobs for at least six months. 

    For lenders, this would show that the borrower is likely to be able to pay. But, for clients who have just switched a job, they have to prove a three-year employment history where there are no long gaps between jobs.

    3. Valid driver’s license and proof of residency

    Submitting a valid driver’s license would show that an applicant is at least of legal age and has legal status in the country. Applicants are also advised to submit recent utility bills as another proof of residency. Note that applicants living in their current residence for six months have a higher chance of getting an auto loan.

    What are the Car Loan Rates by Credit Score?

    Note that your credit score plays a huge role in your loan’s interest rate. Having a lower credit score means you have to pay a higher interest rate. People with a 600 credit score or lower might have to take a higher interest rate. 

    In some states, a bad credit score could also mean higher car insurance rates. Also, as your car stays longer in your possession, the Annual Percentage Rate or the APR increases. Take note that higher interest rates mean that you will have to pay more both long term and short term. To know more about these car loan rates, here’s a summary.

    Credit ScoreAverage APR, new carAverage APR, used car
    Superprime: 781-8503.65%4.29%
    Prime: 661-7804.68%6.04%
    Nonprime: 601-6607.65%11.26%
    Subprime: 501-60011.92%17.74%
    Deep subprime: 300-50014.39%20.45%
    Source: Experian information Solutions

    Does a Car Loan Build a Credit Score?

    There are two ways where your car loan builds your credit score. First is through your payment history. If you pay your loan charges on time, you are given a higher credit score. But if you fail to submit a full loan payment or paid it late, this will reflect negatively in your credit record.

    The other factor is through the credit mix. In simple terms, credit mix refers to types of loan accounts in a person’s credit report. Having different types of loans could help you build a good credit record. If you have mostly had revolving credit (e.g., credit cards), having a car loan could increase your credit score.

    Taking car loans can indeed affect someone’s credit rating. It is then up to that person if this auto credit can positively or negatively impact his credit score. You just have to pay the charges on time for someone who wishes to build a high credit rating.

    Things to Consider When Applying for a Car Financing

    If you are thinking of getting an auto loan, here are things for you to think about. Note that having 600 or lower credit scores raises the eyebrows of lenders. You are more likely to get a less likable deal. 

    So, you must pay particular attention to the following if you want your car loan application to get approved.

    1. Interest Rate Difference

    Also known as the annual percentage rate (APR), interest rate refers to the amount charged by a lender. For many lenders, the credit score is their primary indicator in setting the interest rate. Those with high credit scores tend to get low-interest rate deals while those with low credit scores get high-interest rates.

    When applying for an auto loan or any other type of loan, note that you have to read the loan terms thoroughly. Things like interest rates play a huge role in the money that you pay every month. Be sure that you understand the loan terms before signing a contract or agreement.

    2. Eligibilities and Requirements

    Whatever credit score you have (600 or higher), you must provide specific requirements to the lender for your loan application. Prepare these IDs and documents so you would not have any problem when you submit your application. 

    Take note that other financing offices might ask for other forms aside from these. But, so that you know, here are the basic requirements most lenders ask from clients:

    • Proof of employment (through a pay stub)
    • Proof of residency (through a utility bill)
    • Tax returns (for self-employed individuals)
    • Driver’s license

    3. Getting A Co-Signer or Guarantor

    Having a loan guarantor or co-signer could help your auto loan application. Getting a friend, spouse, or loved one co-sign your loan means that you will have somebody else to assist you if you fail to pay your car loan. 

    Note that your guarantor is legally tied to your contract, so be sure that you explain to them the obligation they will be taking. Being a co-signer or guarantor is not an easy job for anyone to be sure that your friend or family member is on board with this.

    4. Down payment Or Trade-In option

    For people with low credit scores, giving a down payment or having a trade-in option gives them a better chance to get an auto loan. Doing so would lessen the risk in the part of the lender. You must communicate with the lending company, so you know how much down payment you need. Navigate all the options if you wish to get your dream vehicle.

    On the other hand, trade-ins are meant to lower the cost of the vehicle you wish to buy. One reminder, though, some lenders would not accept the trade-in option. You have to clarify to the finance office if this deal is something they would accept.

    What to expect in the finance office?

    When you visit the finance office, remember that you are entering a negotiation. You are not dealing with machines here. While your credit score matters, you can use other aspects of your financial life as a bargaining tool. You have to be persuasive enough so you will be able to take home your desired vehicle.

    You must emphasize your financial records’ positive points more than your flaws and weaknesses. For example, if you have an impeccable payment history, let the lender know this. Pay attention to the details of your financial life that could earn the trust of the lender. In a way, sell yourself to the lender to believe that you are fully capable of taking the loan.

    It would help if you also remembered that each finance office has its own rules and procedures. Do not hesitate to ask your lender for documents and requirements needed. Clarify issues you have about money and car deals. In this way, you are sure that you are getting the best car deal in the market.


    While it is true that credit scores play a vital role in loan applications, know that even people with 600 credit scores or lower have a chance to get their dream vehicle. 

    As discussed above, there are various ways for people with low credit scores to have an auto loan still. The important thing is to show the lender that the applicant has the capacity to pay our credit even with a low credit score.

    Getting a car is an important decision for many of us. The money involved in getting a car is no joke. With this, it is essential to think about our actions before doing anything. Be sure that you are well-informed about the processes of getting an auto loan before doing anything.