How To Buy A Car With A Sub-600 Credit Score

Do you have “bad credit”? If your credit score sits below 600, many say you do. While being placed in that category may not be pleasant, there’s good news: First, you can increase your credit score over time. And second, you can still get a car loan with bad credit.

Where To Find Auto Loans With A Credit Score Under 600

Lenders of all types work with bad credit or subprime borrowers, so know that there’s still hope if you’ve been having trouble finding a loan. Where can you start looking for a bad credit lender to get a vehicle loan?

Here are the top categories:

• Dealerships – Most people with bad credit get financing straight from the dealership. You may be familiar with such places, as they advertise “buy here, pay here,” “no credit check,” “bankruptcies ok,” and so on to attract buyers. The downside to this option is that interest rates are usually high at buy here and pay here dealerships.
• Banks and credit unions – Do you have an account in good standing at your local bank or credit union? Ask them if they can finance your car purchase despite your credit score. They may say yes if you’ve been a loyal customer for years.
• Online auto retailers – Even before the pandemic, online car shopping grew popular. Now, you can buy a car from the comfort of your couch and get it delivered to your door, even with bad credit. Some of the most popular online car retailers for bad credit include CarMax and Carvana.
• Online loan marketplaces – If you want to shop around to compare interest rates without filling out a ton of applications, an online loan marketplace can help you find a loan with bad credit quite quickly. Some will let you prequalify for multiple car loans in minutes to pick the one that best fits your needs.

If you want names of specific lenders (besides CarMax and Carvana) where you can start shopping for a bad credit vehicle loan, here is a shortlist:

• Auto Credit Express
• Autopay
• Digital Federal Credit Union
• Consumers Credit Union
• MyAutoloan

Some will let you get a car loan with a credit score as low as 400, so be sure to try each until you find the proper vehicle financing solution. As you shop around, consider the following:

• Does the lender allow co-signers if you need one to qualify for a loan?
• If you have a limited credit history, does the lender waive the credit history requirement?
• If you want to build credit as you repay the loan, does that lender report to the credit bureaus?
• Can you prequalify through the lender so your credit score doesn’t drop further from a hard pull?
• Can you afford the monthly payment once fees and the APR are included?