What Credit Score Do You Need to Buy a Car?

Someone with a score in the low 700s might see rates on used cars of about 6.05%, compared with 17.78% or more for a buyer scoring in the mid-500s, according to the data from Experian.

On a $20,000, five-year loan, that’s a monthly payment of about $387 for the buyer with better credit versus $505 for the buyer with bad credit. The buyer with better credit would pay about $3,222 in interest over the life of the loan, while the buyer with lesser credit would pay $10,329. Plus, in most states, bad credit can mean higher car insurance rates, too.

If your score is below about 700, prepare for questions about negative items on your credit record and be able to document your answers.

Although it’s possible to get a loan with a low score, “anything under 500 is a flashing red light."