Can You Really Get A Car Loan If You Have Bad Credit?

If you have experienced life circumstances that adversely effected your financial security, your credit rating may have taken a serious hit too. Being out of work or unable to work for an extended period makes keeping up with your obligations difficult. Trying to get on your feet again isn't always easy. If you find yourself in need of a vehicle to get back and forth from a new job, you may be worried that your credit isn't good enough to land you a good deal with a car dealership. However, there are options available for nearly anyone. Understanding your credit score and how it effects a car loan is important.

What is a credit score?

Bankrate defines a credit score as a three-digit number that has been mathematically calculated to represent your risk of becoming delinquent in your payments within the next 24 months. It further explains that while there are many credit-scoring models, FICO is used by 90% of the financial institutions in the United States. Your credit score ranges from 300 to 850 with 300 being the lowest and 850 representing a perfect credit score.

How does your credit score effect your car loan?

When it comes to buying a new or used car, your credit score typically determines what kind of loan you qualify for and the interest rate you will pay. According to, car loans are classified as super prime, prime, subprime and deep-subprime.

What do the car loan types mean?

Each loan type comes with a different interest rate, with the super prime car loan garnering the lowest interest rate and the deep-subprime loan claiming the largest interest rate. Likewise, the super prime loan requires the highest credit rating while the deep-subprime loan is reserved for those with the lowest credit rating.

What credit rating do you need for each type of loan?

There may be some variations in the cut-off score to qualify for each type of loan, as car dealers are allowed to set their own requirements. offers the following credit scores as a general guideline, but keep in mind that your car dealer may have different numbers in mind. Note that there are gaps in's outline of credit scores, which probably accounts for the area where the most variation occurs between car dealer cut off rates.

  • Super Prime: Credit Score 781 or above.
  • Prime: Credit Score 661 to 780
  • Subprime: Credit Score – 501 to 600
  • Deep-subprime: Credit Score – Under 500

How much interest do you need to pay?

You interest rate will vary depending on the type of car loan you qualify for. Some dealers offer special 0% financing for super prime buyers, but those with a deep-subprime status may pay 13% or more, says

What if you are denied a car loan?

If your credit score is low, your car dealer may deny you traditional financing. In this case, you may have several options.

  1. Get a co-signer for the loan. Bear in mind that if you are unable to make the payments, your co-signer will be held responsible for the loan.
  2. Get a personal loan. Your local bank or credit union may extend you a loan, even if your credit score is low, especially if you have been doing business with them for years and have always been in good standing. Explain your situation honestly.
  3. Sign up for payroll deductions. Some car dealers will work with you to get you on the road by allowing you to sign up for weekly payroll deductions from your new job.

If you have always had good credit, but have suffered a hit due to the loss of work, illness or other family emergency, talk to your car dealer. If you can show that your financial problems are behind you, it may be enough to secure a traditional car loan through the dealer. For more information, check out a website like

About Me

Buying a New Car from an Auto Dealer

Hi. My name is Beth Wilson, and I want to thank you for stopping by my website. I recently purchased my very first new car. I’ve always had used cars in the past. To be honest, as excited as I was to be able to buy a new car, I was also scared. I had heard so many horror stories about car dealers ripping people off. Thankfully, my experience was nothing but pleasant. Prior to stepping foot into the car dealership, I did a good deal of research about the vehicles I was interested in. I was able to carry on an educated conversation with the salesperson and didn’t feel the least bit intimidated. I would like to share my shopping experience with you in the hope that you will find some valuable tips.