What Is Bad Credit For An Auto Loan?

Nov 24, 2023 By Susan Kelly

Generally, a credit score in the middle 600s or below is considered bad credit for a vehicle loan. VantageScore and FICO are the two credit scoring models employed most often, yet their respective score levels are not identical. In addition, some auto lenders use a slightly modified version of the FICO model designed specifically for the automotive sector.

Lenders evaluate criteria in addition to a borrower's credit score when determining whether or not to accept an auto loan. These considerations include the borrower's payment history, regular income, work duration, the debt quantity, and loan size. Hence, even if you have a credit score considered "bad" or below, getting accepted for an auto loan is still possible if other aspects of your application are in your favor.

On the other hand, you may come across additional limits, such as a lender necessitating a shorter loan duration. According to data provided by Experian, a credit reporting bureau, around one in six people who applied for auto loans in 2021 had credit ratings of less than 601.

Consumers Credit Union

Loans for the purchase of new and used automobiles and loans for refinancing existing auto loans are available from Consumers Credit Union, often abbreviated as CCU. In addition, it provides lease buyout loans, although a member at a dealership may only request these loans. CCU is flexible compared to other auto lenders since no limitations are placed on the vehicle's age or mileage.

On the CCU website, you can view the current auto loan rates; however, these rates are "as low as" rates, which means they are only available to applicants with excellent credit. On the website, candidates may acquire a rate estimate without harming their credit score. The applicant's credit score will take a little hit due to a hard credit pull that CCU will initiate if they go through with an auto loan.

CCU will reduce your interest rate by 0.25 percentage points if you set up your loan payments to be made automatically. This discount is reflected in the rates that are shown on the website of the credit union. Consumers may submit their application for a CCU auto loan in several ways. In addition to submitting their applications online or over the phone, prospective customers may do so at any CCU location in Illinois or at any of the 85 dealerships across Illinois and southern Wisconsin.

In addition, the credit union collaborates with TrueCar to provide a convenient online platform for purchasing new and pre-owned automobiles. Prospective purchasers of automobiles can look for autos close to their ZIP code and get special member prices. Consumers who use the vehicle-buying service should be informed that there is no reduction in the loan's interest rate and that they may get many calls and emails from participating auto dealers as a consequence of utilizing the service.


myAutoloan.com is a direct lending marketplace that was established in 2003. On the applicant's behalf, the marketplace solicits proposals from a maximum of four different lenders. Borrowers are matched with various auto loans options, such as loans to purchase a new or used vehicle from a dealer, loans to purchase a vehicle from a private party, loans to refinance an existing loan, and loans to buy out a loan lease. myAutoloan.com is quite open and honest about its practices on its website, including displaying rates, providing broad qualifying standards, and providing thorough, frequently asked questions.

When a customer applies to myAutoloan.com, the firm executes a "soft credit draw," which does not impact the customer's credit score. This allows the company to connect customers with lenders. The applicant will then get up to four authorized offers from different lenders, from which they may select to submit their application. When an application decides to take a lender up on their offer, the lender may do a hard credit pull on the applicant.


Carvana is a second-hand automobile dealer that does all of its business online and provides customers with financing options and guarantees on the cars they purchase. Customers who purchase cars via the Carvana website can pick a vehicle, determine their financing conditions, and finish the loan paperwork without leaving the comfort of their homes.

Carvana maintains an inventory of over 25,000 automobiles with low total mileage. Each goes through a comprehensive check of 150 points and includes a free report on the vehicle's history from Carfax. Carvana pricing is non-negotiable. Carvana not only buys cars but also buys trade-ins and used cars outright. If you trade in an item, you might pay less in sales tax.

When you purchase a vehicle from a seller outside Carvana's local marketplaces, you are responsible for paying the shipping charges. You must bring your car to one of Carvana's service sites to trade or sell it.

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