Can I get a car loan with a credit score of 500? (2024)

Apr 4, 2023

Can I get a car loan with a credit score of 500? (1)

If you have a low credit score, getting approved for a car loan for bad credit can seem like a daunting task. However, at Toyota Direct, we believe that everyone deserves the opportunity to own a reliable and affordable vehicle. That’s why we work with a variety of lenders to help our customers secure car loans, even if they have less than perfect credit. We understand that life happens, and we’re here to help you get back on the road with an auto loan for bad credit that fits your budget and financial situation.

Yes, it is possible to get a car loan with a credit score of 500, but it can be infinitely more challenging to find a lender willing to approve the loan. A credit score of 500 is considered poor credit, and lenders will likely see you as a higher risk borrower. You might also have a higher interest rate and may need to provide a larger down payment to finance a car. However, at Toyota Direct, we work with a variety of lenders and specialize in helping customers with all types of credit scores, including those with poor credit. Our finance experts will work with you to find a loan that fits your budget and financial situation at our used car lot in Columbus, Ohio.

If you have a low credit score or bad credit, there are some simple steps you can take to apply for a car loan:

  • Check your credit report: Before applying for a car loan for bad credit, it’s important to check your credit report for any errors or mistakes that could be affecting your score. If you see any errors or anomalies in your credit report, you’ll have time to rectify them before visiting our used car dealership in Columbus, Ohio.
  • Improve your credit score: If you have time before applying for an auto loan for bad credit, work on improving your credit score by paying off any outstanding debts and making payments on time.
  • Get pre-approved: Before shopping for a car, get pre-approved for a bad credit car loan from a lender like Toyota Direct that specializes in bad credit loans.
  • Consider a co-signer: If your credit score is too low to qualify for a loan, consider finding a co-signer with good credit to help you get approved for your auto loan for bad credit.
  • Make a larger down payment: If you can afford it, making a larger down payment can help lower your monthly payments and make you a more attractive candidate for a bad credit car loan.
  • Be prepared to pay a higher interest rate: Bad credit auto loans typically come with higher interest rates, so be prepared to pay more in interest over the life of the loan.

Ready to finance the ideal used car for your price range and driving needs? Toyota Direct is here to help! Stop by our bad credit car dealership today to explore our current selection!

Tags: auto loan for bad credit, car loans bad credit, used car dealerships in Ohio
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Can I get a car loan with a credit score of 500? (2024)


Can I get a car loan with a credit score of 500? ›

Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.

How much of a car loan can you get with a 500 credit score? ›

Auto loan origination by credit score
Credit scoreNew car loan distributionUsed car loan distribution
Prime: 661-780.47.82%.43.03%.
Nonprime: 601-660.12.47%.20.75%.
Subprime: 501-600.5.48%.18.92%.
Deep subprime: 300-500.0.32%.2.61%.
2 more rows
Feb 29, 2024

How big of a loan can you get with 500 credit score? ›

Best Personal Loans for a 500 Credit Score
LenderLoan AmountsAPRs
Oportun$300 - $18,50010.07% - 35.95%
OneMain Financial$1,500 - $20,00018% - 35.99%
RISE$500 - $5,00060% - 299%
Jora Credit$500 - $4,00099% - 349%
1 more row
Aug 26, 2022

What is the lowest credit score to finance a car? ›

What Is the Minimum Score Needed to Buy a Car? In general, lenders look for borrowers in the prime range or better, so you will need a score of 661 or higher to qualify for most conventional car loans.

Is 500 a good credit score to buy a car? ›

However, the vast majority of borrowers have scores of 661 or higher. Borrowers with scores of 501 to 600 account for about 13% of cars financed, while people with scores of 500 or below account for less than 2%, according to Experian.

What is the easiest car company to get financing? ›

After researching the car finance industry, we think that myAutoloan is best for those with bad credit. The company offers auto refinancing, lease buyouts and loans for new and used cars. Additionally, the marketplace only requires a credit score of 575 — making it easier for subprime borrowers to get a loan.

What is a fair credit score to buy a car? ›

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

What is the easiest loan to get approved for? ›

Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Personal loans with essentially no approval requirements typically charge the highest interest rates and loan fees.

Why can't I get a loan with a 500 credit score? ›

Lenders may accept borrowers with a 500 credit score but expect you to meet additional criteria, such as a minimum income or employment history. Look into fees and interest rates. Ask about fees and interest rates you might pay if you get a loan.

How to get a loan when no one will approve you? ›

Ask Someone To Co-Sign

Getting a personal loan with a co-signer that has a strong credit score and a solid income can boost your application. Your co-signer – ideally, a family member or close friend – will apply alongside you, and you'll both be responsible for repayment of the loan.

What credit score is needed to buy a car without a cosigner? ›

In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.

Is it hard to get approved for a car loan? ›

Americans are having a harder time getting approved for auto loans, as banks worry over the risk of defaults at a time when high interest rates and elevated car prices are squeezing budgets. With borrowers struggling to make their monthly car payments, banks are responding by tightening credit standards.

How fast will a car loan raise my credit score? ›

How fast will a car loan raise my credit score? There's no set time frame for how long it takes a car loan to improve your credit score. After buying a car, you can expect to see your score improve after making monthly payments on time and paying down your loan balance.

Can you get anything with a 500 credit score? ›

A 500 credit score can be a sign of past credit difficulties or a lack of credit history. Whether you're looking for a personal loan, a mortgage or a credit card, credit scores in this range can make it challenging to get approved for unsecured credit, which doesn't require collateral or a security deposit.

What can you do with a 500 credit score? ›

Since having a credit score of 500 can make it tough to be approved for some traditional, or unsecured credit cards, you may want to consider applying for a secured credit card. If approved, you can use a secured credit card to make purchases in person or online, just like with an unsecured credit card.

Can you do anything with a 500 credit score? ›

When your score is 500, you'll have trouble qualifying for some financial products. You will have to pay the highest rates on loans and credit cards, and you may pay more for car insurance. The good news is it might not take much to move the needle on your score.

Can I get a $40,000 car with a 600 credit score? ›

It's essential to be knowledgeable about how your auto loan process will be different than someone with a higher score. You might not have the same options, but you can still get an auto loan with a 600 credit score.

What credit score do I need for a 50000 car loan? ›

To buy a $50,000 car and get favorable auto loan options, it's best to have a credit score in the prime or super prime categories. Prime borrowers are those with a credit score within the 661-780 range, while super-prime borrowers fall within the 781-850 range.

Can I get a 30k car with a 650 credit score? ›

If your credit score is above 620, you are likely to get a car loan with favorable terms. Most loans you can get with a 650 credit score require a down payment and come with terms of 48 months or longer. You can expect average interest rates because 650 is a middle-of-the-road credit score.

What is 30% of 500 credit limit? ›

Keep your credit utilization low.

Aim to keep your credit utilization ratio below 30%. This means that on a credit card with a $500 credit limit, you should try to keep your monthly statement balance below $150.


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