In summary, having less-than-ideal credit may not prevent you from obtaining a car loan, but it may have an impact on the interest rate and other loan conditions. Generally, the lower your credit scores, the higher your interest rate will be. However, there might be methods to obtain a better rate, such as obtaining a co-signer or making a down payment. Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect.
We think its important for you to understand how we make money. Its pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make enables us to produce our other fantastic tools and instructional materials as well as to provide you with free credit scores and reports.
Compensation may factor into how and where products appear on our platform (and in what order). However, since the majority of our revenue comes from the offers you accept, we make an effort to present you with offers we believe are a good fit for you. Thats why we provide features like your Approval Odds and savings estimates.
Naturally, not all financial products are represented by the offers on our platform, but our aim is to present you with as many excellent options as possible.
Yes, you are in the “good” credit range with a 686 credit score, meaning that most lenders will probably let you get a car loan. But it’s crucial to keep in mind that the interest rate you get can be greatly influenced by your credit score.
What you should know about obtaining a car loan with a credit score of 686 is as follows:
The good news:
- You’re eligible for most car loans. Lenders generally consider borrowers with credit scores between 670 and 739 to be “good” credit risks. This means you’ll have a wide range of lenders to choose from.
- You’ll likely qualify for competitive interest rates. While your interest rate won’t be as low as someone with excellent credit, it’ll still be significantly lower than what you’d get with a bad credit score.
The not-so-good news:
- You might not get the best interest rates. Lenders typically offer their best interest rates to borrowers with credit scores above 740. This means you could end up paying more in interest over the life of your loan.
- You might need a larger down payment. Some lenders may require a larger down payment from borrowers with lower credit scores.
Here are some tips for getting the best possible car loan with a 686 credit score:
- Shop around for lenders. Compare interest rates and terms from multiple lenders before choosing one.
- Make a larger down payment. The more money you put down, the less you’ll have to borrow and the lower your monthly payments will be.
- Get a cosigner. If you have a cosigner with good credit, it can help you qualify for a lower interest rate.
- Improve your credit score. Even a small increase in your credit score can make a big difference in the interest rate you qualify for.
Here are some ways to improve your credit score:
- Pay your bills on time. This is the most important factor in your credit score.
- Keep your credit utilization low. This means using less than 30% of your available credit.
- Don’t apply for new credit too often. Every time you apply for new credit, a hard inquiry is placed on your credit report. Too many hard inquiries can lower your credit score.
- Become an authorized user on a credit card with good credit. This can help you build your credit history without having to open a new account.
By following these tips, you can increase your chances of getting a car loan with a good interest rate.
Here are some additional resources that you may find helpful:
- Upstart Learn: https://www.upstart.com/credit-score/
- Credit Karma: https://www.creditkarma.com/
- NerdWallet: https://www.nerdwallet.com/
Recall that you can still obtain a fantastic auto loan even with a credit score of 686. Just be sure to shop around and compare your options.
Car loan rates by credit score
Based on Experian data from the fourth quarter of 2022, this table displays the average auto loan rate for both new and used cars.
| Deep subprime (300–500) | Subprime (500–600) | Nonprime (600–660) | Prime (661–780) | Super prime (781–850) | |
|---|---|---|---|---|---|
| New | 13.42% | 10.79% | 8.12% | 5.82% | 4.75% |
| Used | 20.62% | 17.46% | 12.08% | 7.83% | 5.99% |
As you can see, if your credit score is good (i.e., “prime” or “super prime”), you will pay less for your loan than if it is average or lower. And having poor credit (considered “deep subprime”) means you’ll pay high interest rates.
Even though a few extra percentage points might not seem like much, they quickly add up when applied to the thousands of dollars that auto loans typically cost.
Here’s how this plays out in reality. Assume that two borrowers, one prime and the other subprime, wish to borrow $10,000 to purchase a used car. They both have a 60-month loan term. The subprime borrower is offered a 17. According to Experian, the average rate for borrowers in this range in the fourth quarter of 2020–2022 was 46%. The prime borrower is offered the average 7. 83% rate.
Over time, the subprime borrower will pay back about $15,060, or $5,060 in interest. The prime borrower will pay about $2,117 in interest, for a total cost of $12,117. That’s a difference in interest paid of roughly $2,943. In this instance, credit scores were the deciding factor.
By taking action to raise your credit score, you may be able to receive a better loan with more favorable terms, ultimately putting more money in your pocket.
Work on your credit scores
Working on your credit scores could unlock lower interest rates and preapprovals by more lenders. How much debt you have and how well you pay your bills on time both have a big impact on your scores. Focusing on these two important factors could be a huge help in improving your credit.
Can I buy a car with a 600 credit score?
FAQ
Is 686 a good credit score to buy a car?
How much of a loan can I get with a 686 credit score?
Can you get approved for a car with a 680 credit score?
Can I get a loan with 686 credit score?