If youre struggling to raise your credit score and buy a car, youre not alone. Keep reading to find out what car loan you can get with a 650 credit score.
Credit scores fluctuate naturally throughout life. When you have a lot of debt, like when you apply for a mortgage or car loan, your score may be lower; as you pay off debt, it may rise. Unfortunately, it might not be the best timing for your high and low credit scores, particularly if you have a credit score of 650 and are thinking about getting a car loan. You might be wondering if your score will prevent you from getting a loan and how it will affect the interest rate that you are given.
Your credit score of 650 puts you 10 points above the required minimum for a FINN car subscription. FINN offers a range of vehicles you can choose from, including SUVs, trucks, electric cars, and premium sedans. Your monthly subscription fee from FINN includes all maintenance, registration, insurance, and depreciation costs, so your only expenses will be gas and the occasional car wash. Additionally, FINN will deliver the make and model of your choice right to your door so you can begin your subscription journey right away.
Spoiler alert: Yes, you can! But before you jump into a dealership, let’s take a closer look at what you can expect with a 650 credit score.
What is a credit score?
Think of your credit score as a financial report card. It’s a three-digit number between 300 and 850 that reflects how well you manage your credit. The higher the score, the better your creditworthiness appears to lenders.
Is a 650 credit score good?
A 650 credit score falls into the “fair” category. While not the best, it’s not bad either. It means you’re on the right track, but there’s room for improvement.
What car loan can you get with a 650 credit score?
With a 650 credit score, you can still get a car loan, but the terms might not be as favorable as someone with a higher score Here’s what you can expect:
- Interest rates: You’ll likely face higher interest rates, which means you’ll pay more for the car over time. The average interest rate for a used car with a 650 credit score is around 13%, and for a new car, it’s around 9%.
- Down payment: You may need to make a larger down payment, typically around 20% of the car’s value.
- Loan terms: You might have a shorter loan term, meaning you’ll have to pay off the car faster.
Can you refinance a car loan with a 650 credit score?
Absolutely! If you improve your credit score after taking out the loan you can refinance it to get a lower interest rate and save money.
Can you lease a car with a 650 credit score?
Leasing a car with a 650 credit score is possible, but the terms might not be ideal. You may face higher lease payments or require a larger down payment.
Tips for building your credit score:
- Pay your bills on time: This is the most important factor in your credit score.
- Increase your credit limit: This can help lower your credit utilization ratio, which is the amount of credit you’re using compared to your available credit.
- Become an authorized user on a responsible credit card: This can help you build credit history without having to open a new account.
- Report your rent payments: Some credit bureaus now allow you to report your rent payments, which can help improve your credit score.
- Pay off any collection amounts: These can seriously damage your credit score, so prioritize paying them off.
Alternatives to car loans:
There are alternatives if the conditions of a car loan with a 650 credit score don’t sit well with you:
- Save up for a car: This takes time and discipline, but it can save you a lot of money in the long run.
- Use public transportation or ride-sharing services: This can be a good option if you live in a city with good public transportation options.
- Consider a car subscription service: This is a relatively new option that allows you to subscribe to a car for a monthly fee. This can be a good option if you don’t need a car every day.
The bottom line:
Getting a car loan with a 650 credit score is possible, but you’ll likely face higher interest rates and other unfavorable terms. However, there are ways to improve your credit score and get a better deal on a car loan in the future. In the meantime, consider alternative options like saving up for a car or using public transportation.
Remember, the right car for you is the one that fits your budget and needs. Don’t let your credit score hold you back from getting the car you want.
What is a credit score?
Your credit score is a number that the three credit bureaus—Experian, TransUnion, and Equifax—acquire to indicate how well you manage credit. Your payment history, any amounts owed, the length of your current credit history, any new credit accounts you open, and your credit mix all go into your credit score. Your amounts owed and payment history comprise the most significant portions of calculating your credit score.
The average credit score consists of several elements that factor into its calculation, including:
- Debt-to-income ratio
- Payment history
- Number and type of loans
- Available credit
- New credit
The question of credit often comes up when discussing APR on a car loan. The annual percentage rate (APR) represents the interest you pay on the loan based on your creditworthiness. Higher scores allow borrowers to unlock lower rates, while lower rates make borrowers more risky and result in higher rates.
What interest rate can you get with a 650 credit score?
Current interest rates for borrowers with a 6500 credit score are approximately 2013 percent for used cars and 9 percent for new cars, respectively, as shown in the table below:
|
Credit Score Category |
Average Used Car Rate |
Average New Car Rate |
|
Poor (below 579) |
±21% |
±14% |
|
Fair (580 to 619) |
±18% |
±11% |
|
Good (620 to 659) |
±13% |
±9% |
|
Great (660 to 719) |
±8% |
±6% |
|
Excellent (720 and above) |
±7% |
±5% |
If you were to finance a new car for $40,000 at the 9% interest rate, you would be qualified for the loan based on your credit score, which would require you to pay $3,600 in interest fees. Over the course of the loan, the same car would only cost you $2,400 in interest payments if you were to increase the points by just 10. A $40,000 used car will cost you $5,200 in interest if your credit score is 650, and $3,200 if it is 10 points higher. Used cars operate on a similar basis.
What Credit Score Do Car Dealers Use?
FAQ
What kind of car loan can you get with a 650 credit score?
How much loan can I get with a 650 credit score?
What is the lowest credit score to buy a car?
Can I get a 40k car with 600 credit score?
Can a 650 credit score get a car loan?
A fair credit score of 650 is generally sufficient for getting a new or used car loan. Consumers with a 650 credit score are classified as near prime or nonprime. You might not qualify for the best annual percentage rates (APRs) with a 650 credit score, but you may qualify for auto loan refinancing.
What credit score do you need to buy a car?
Here is a list of our partners and here’s how we make money. You need a loan to buy a car, but with fair credit — generally a credit score between 630 and 689 — you worry you won’t qualify for a good interest rate. You might also be concerned that, with a lower credit score, the dealer might mark up your rate above what you really deserve.
Is a 650 credit score good?
Lenders may view a 650 credit score as being near prime, which is generally good enough for borrowers to qualify for financing. As mentioned earlier, a 650 credit score is typically considered near prime, nonprime, and fair.
Can I buy a car if my credit score is bad?
The lower your credit score, the lower your chances of you being able to buy a car. If your credit score needs a lot of work, it may be hard to find a lender who will approve you for a car loan. If you’re not able to qualify for an auto loan on your own, you may need to find a co-signer with better credit.