What Credit Score is Needed to Finance a Car?

When you have bad credit, car finance options might feel out of your reach. But the good news is that there is way more flexibility in financing than you might think. What credit score is needed to finance a car? Let’s go through the basics of car financing at First Texas Honda, and find out why you’re only a few steps away from your next vehicle.

Average Credit Score to Finance a Car

What credit score is needed to finance a car? There’s no magic number, but higher credit scores are seen more favorably than lower credit scores by lenders. Theaverage credit score to finance a car is 660, but every credit score is grouped into one of five categories. See how the five categories compare:

• Superprime (781 to 850): This is the highest credit score category, so drivers can expect easy approvals with great interest rates.
• Prime (661 to 780): Though not quite as high as superprime, prime credit scores are also seen very favorably by lenders with easy approval.
• Nonprime (601 to 660): The average credit score in Round Rock and San Marcos falls into this category. Most drivers can expect to be approved, but they will typically have a higher APR than superprime or prime drivers.
• Subprime (501 to 600): At this level, getting approved for a loan is more difficult, and higher interest rates are common. 
• Deep Subprime (300 to 500): Though this is the most challenging category to secure financing, there’s no need to panic! You still have options, and First Texas Honda can talk you through them.

Financing a Car with Bad Credit

Let’s say you’re in the subprime or deep subprime category. What do you do? With the right preparation, you can still find your way to a great car loan. You can try in-house financing options, or “Buy Here Pay Here” services, but you still have options at a traditional dealership. Here are some considerations:

• Focus on Positives: Just because you have bad credit now doesn’t mean you’ll always have bad credit. It’s never too late to move forward, and your future car loan can actually help improve your credit score for the future.
• Reduce Debts: Do you have any debts that you can address immediately? Many Cedar Park drivers choose to pay off their smallest debts for a quick boost to their credit score. This can show responsibility to lenders as well.
• Proof of Income: Demonstrating your repayment record is a great way to gain points from lenders. This could include anything from pay stubs, proof of address, cell phone bills, and auto insurance documents, to proof of employment.
• Down Payment: A bigger down payment can help you get ahead. Putting down around 25% will significantly raise your likelihood of approval, and it will also bring down your monthly payments for the future. If 25% seems like a lot, try looking for less expensive vehicles with good maintenance records.

Explore Your Car Finance Options at First Texas Honda

No matter your credit score, finance options are available at First Texas Honda. We welcome you to visit us in Austin, and our finance team can guide you through the process with total confidence. If you’re ready to go, you can also apply for financing today or contact us with your questions!