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Buying a car is one of the biggest purchases many people make. With the average new car price topping $47,000 in 2022, most buyers need to finance their purchase with an auto loan. Your credit score plays a huge role in determining whether you can get approved for a car loan and how much you’ll pay in interest.
So what are your chances of buying a car if your credit score is 589?
I’ll walk through everything you need to know about getting a car loan with a 589 credit score. I’ll cover:
- What a 589 credit score means
- How it impacts auto loan interest rates
- Tips for getting approved and securing a better rate
- Steps to improve your credit score before applying
Let’s hit the road!
What Does a 589 Credit Score Mean?
A 589 credit score falls into the “fair” credit range according to FICO’s scoring model. Here’s how it stacks up:
- 300-579: Poor
- 580-669: Fair
- 670-739: Good
- 740-799: Very Good
- 800-850: Exceptional
While a 589 credit score is not terrible, it does signify you’ve had some issues in the past managing credit or loans. Potential lenders see applicants with fair credit as riskier borrowers
Your 589 credit score was likely impacted by:
- Missed or late payments
- High credit utilization rate
- Collections accounts
- Bankruptcies or foreclosures
The lower your score, the harder it will be to get approved for a car loan, especially at competitive interest rates.
How a 589 Credit Score Impacts Auto Loan Rates
Your credit score directly correlates with the interest rate a lender will offer on your auto loan. The lower your score, the higher your rate.
According to myFICO, here are the average used car loan rates by credit score:
- 781-850 (Exceptional): 5.34% APR
- 661-780 (Very Good): 7.07% APR
- 589-660 (Fair): 13.15% APR
As you can see, having a 589 credit score puts you in line for a much higher interest rate than borrowers with good or excellent credit, almost doubling your APR.
Over a 5-year, $20,000 loan term, that translates to:
- Exceptional credit: $368 monthly payment and $2,775 total interest
- Very Good credit: $416 monthly payment and $4,948 total interest
- Fair credit: $512 monthly payment and $9,786 total interest
The difference in total interest paid is huge – over $7,000! Boosting your credit score before applying for an auto loan could put thousands of dollars back in your pocket.
Tips for Getting Approved and Securing a Better Rate
While a 589 credit score makes getting a car loan tougher, it is still possible if you take the right approach. Here are some tips:
Apply for pre-approval: Many lenders let you get pre-approved for financing before you start shopping. This shows sellers you are serious and gets the loan process started.
Make a large down payment: Putting 20% or more down signals to lenders you are less risky. A bigger down payment can help offset a lower score.
Find a co-signer: Asking a friend or family member with excellent credit to co-sign your loan improves your chances of approval and can lower your interest rate.
Comparison shop: Check rates from multiple lenders and see if any are willing to offer better terms to win your business. Credit unions often have good rates.
Consider “buy here pay here” dealers: While expensive, these dealers specialize in financing buyers with poor credit. It may be your only option if banks deny you.
Get pre-qualified, not just pre-approved: Pre-qualification uses a soft credit check and gives you an estimate of your actual loan offer.
How to Improve Your Credit Score Before Applying
If your credit score is currently holding you back from getting the best auto financing, here are some tips to improve it:
-
Pay all bills on time – Payment history is the biggest factor in your credit score. Set up automatic payments if needed.
-
Lower credit card balances – Keep balances below 30% of the limit on each card. Pay down balances aggressively.
-
Avoid new credit inquiries – Too many hard inquiries from applying for credit can ding your score. Wait 6-12 months before applying for a car loan.
-
Become an authorized user – Being added as an authorized user on a friend/family member’s credit card can give your score a boost.
-
Dispute errors on your credit reports – Incorrect information can unfairly lower your score. Get errors fixed.
-
Limit closed accounts – Closing credit cards or loans can actually lower your score temporarily. Avoid closing accounts right before applying for a car loan.
It can take a few months of positive credit habits to significantly raise your score. Be patient and stay focused on boosting your credit health before applying.
The Bottom Line
A credit score of 589 means you will have a very difficult time being approved for a low interest rate on a car loan. While buying a car with bad credit is possible, you will pay thousands more in interest compared to those with good or excellent scores.
Improving your credit score over time before applying for an auto loan is wise. But if buying a car now is essential, be prepared for higher rates and explore all options to get approved, even less than ideal ones. With determination and smart financial moves, a 589 credit score doesn’t have to stop you from getting the keys to your new ride.
Auto loan interest rates by credit score
When you apply for a car loan, the average auto loan rate you receive will primarily be based on your credit score.
| Credit score | New cars | Used cars |
|---|---|---|
| Super prime (781-850) | 5.18% | 6.82% |
| Prime (661-780) | 6.70% | 9.06% |
| Nonprime (601-660) | 9.83% | 13.74% |
| Subprime (501-600) | 13.22% | 18.99% |
| Deep subprime (300-500) | 15.81% | 21.58% |
Borrowers in the super prime range are more likely to qualify for auto loans with below-average rates. That said, there are bad credit auto loans available, but the cost of financing a car may be significantly higher. Learn more:
What credit score is needed to buy a car?
The average credit score was 748 for a new car and 684 for a used car, according to data from Experian.
There is no official minimum credit score required to buy a car, but most lenders have minimum standards for financing. Your credit score demonstrates your likelihood of repaying a loan, which is why it is one of the main tools lenders use when determining if you qualify for a car loan. Generally speaking, the higher your credit score, the more likely you are to be approved for an auto loan and receive a competitive interest rate.
This table illustrates loan risk distribution, which is the percentage of people in each credit band auto lenders chose to finance. You are much more likely to be approved for an auto loan with a score of 600 or above because lenders have low risk tolerance for borrowers.
| New car financing | Used car financing | All car financing | |
|---|---|---|---|
| Super prime (781-850) | 47.44% | 22.34% | 30.75% |
| Prime (661-780) | 35.62% | 35.26% | 35.38% |
| Nonprime (601-660) | 10.87% | 18.35% | 15.84% |
| Subprime (501-600) | 5.61% | 20.69% | 15.64% |
| Deep subprime (300-500) | 0.46% | 3.36% | 2.39% |
Those with credit scores under 500 accounted for just 2.39 percent of all auto loans in the first quarter of 2025. Scores between 501 and 660 fared better and accounted for over 30 percent of auto loan originations.
What Credit Score Do Car Dealerships Use? (Which Credit Bureau Is Most Used for Auto Loans?)
FAQ
Can I get a car with a 589 credit score?
… to get an auto loan with nearly any credit score, most lenders are looking for buyers in the prime credit score range with a credit score of 661 or above …Mar 31, 2025
What can I get with a 589 credit score?
| Type of Credit | Do You Qualify? |
|---|---|
| Secured Credit Card | YES |
| Unsecured Credit Card | YES |
| Home Loan | YES (FHA Loan) |
| Personal Loan | MAYBE |
What is the lowest credit score to buy a car?
What credit score is needed for a $30,000 car loan?