A Simple Guide to Improving Your Credit and Getting Approved for a Car Loan
If you're planning to finance a vehicle, your credit score plays a big role in what kind of loan offers you’ll qualify for. It affects not just your ability to get approved, but also what interest rate and terms lenders will offer you.
The good news? You don’t need perfect credit to get a car loan. And if your credit could use some improvement, there are real, practical steps you can take to raise your score and increase your odds of getting approved.
Let’s walk through what matters—and how to position yourself for the best possible outcome when you apply for financing.
What Lenders Look For
When you apply for an auto loan, lenders will consider:
Your credit score (FICO score is most common)
Payment history (on-time vs. late payments)
Debt-to-income ratio
Length of credit history
Types of credit used (credit cards, loans, etc.)
Recent credit activity
They want to see that you’ve handled credit responsibly and that you can reasonably afford the new loan you're applying for.
What’s a “Good” Score?
Here’s a general breakdown of FICO credit score ranges:
300–579: Poor
580–669: Fair
670–739: Good
740–799: Very Good
800–850: Excellent
Most auto loan approvals fall in the 600–750 range. The better your score, the lower your interest rate is likely to be. But even if you're in the 500s or low 600s, approval is still possible—especially if you're working with a dealership that partners with flexible lenders (like we do).
How to Improve Your Credit Before Buying
If you're planning to buy a car in the next 3–6 months, here are some smart moves to boost your credit score in the meantime:
1. Pay Your Bills On Time
This is the biggest factor in your score. Even one late payment can hurt you, so set reminders or autopay if needed.
2. Pay Down Credit Card Balances
Your credit utilization—how much of your credit limit you're using—should ideally stay below 30%. If you're over that, try to bring balances down before applying.
3. Don’t Open or Close Accounts
Avoid opening new credit cards or loans right before applying, and don’t close old accounts unless absolutely necessary. Both actions can temporarily lower your score.
4. Check Your Credit Report for Errors
Mistakes happen. Use sites like AnnualCreditReport.com to get a free copy of your report, and dispute anything that’s incorrect.
5. Avoid Large Purchases Before Applying
Big purchases on credit can hurt your score or raise red flags with lenders. Try to keep things stable for a few months before applying.
How to Increase Your Odds of Approval
Even if your credit isn’t perfect, you can improve your chances of getting approved by doing the following:
Save for a larger down payment. This reduces the lender’s risk and can lead to better terms.
Consider a co-signer. If someone with stronger credit is willing to co-sign, it can help secure approval (but both parties are responsible for the loan).
Choose a vehicle within your budget. Lenders are more likely to approve loans for vehicles that make sense based on your income and credit profile.
Get pre-qualified or pre-approved. This gives you an idea of what you might be eligible for and avoids surprises.
At our dealership, we work with a wide network of lenders—including those that specialize in helping buyers with challenged or limited credit. Whether you're rebuilding credit or applying for your first auto loan, we’ll work to find an option that fits.
Final Thoughts
Your credit score doesn’t have to be perfect to get a car loan. With a little preparation, some smart money habits, and the right dealership behind you, you can get approved—and start building even stronger credit for the future.
If you're not sure where you stand, stop by or reach out. We’ll walk you through your options, answer any questions, and help you take the next step toward owning a vehicle that fits your life and your budget.
