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Getting a new car is an exciting prospect for many people. However, your credit score plays a big role in determining if you can get approved for an auto loan and the terms of that loan. So what are your chances of getting a new car if your credit score is around 590?
What Credit Score is Considered a 590 Score?
Credit scores range from 300 to 850. A score of 590 falls on the lower end of the fair credit range. According to FICO, the most widely used credit scoring model a fair credit score is in the 580-669 range.
While a 590 credit score is not terrible, it is considered subprime. Subprime borrowers are seen as higher risk by lenders. You can certainly get a car loan with a 590 credit score, but you will pay higher interest rates and may face other restrictions compared to borrowers with good or excellent credit.
Can You Get Approved for an Auto Loan with a 590 Credit Score?
The good news is yes, you can get approved for a car loan with a 590 credit score in most cases Subprime lenders exist to provide financing options to borrowers with poor credit
However, approval is not guaranteed. According to Experian data, only 15.6% of auto loans went to subprime borrowers (credit scores 501-600) in Q1 2022. Prime and superprime borrowers with scores above 601 made up the other 84.4% of loans.
So while possible, it may take more shopping around to find a lender willing to approve a 590 credit score. Having a steady income and making a larger down payment can help offset the risk of your lower credit score when applying for a car loan.
590 Credit Score Auto Loan Interest Rates
While getting approved is the first hurdle, the interest rate you pay is the other big factor that your 590 credit score impacts.
The average used car interest rate for borrowers with fair credit scores of 590 was 1374% in Q1 2022 according to Experian That compares to an average rate of just 6.82% for borrowers with excellent credit (scores of 781-850).
Here’s an overview of current auto loan interest rates by credit score tier:
- Superprime (781-850): 5.18% new, 6.82% used
- Prime (661-780): 6.70% new, 9.06% used
- Nonprime (601-660): 9.83% new, 13.74% used
- Subprime (501-600): 13.22% new, 18.99% used
As you can see, falling into the subprime range with a 590 score means paying interest rates of 13% or higher in most cases. That results in much higher auto loan payments compared to prime and superprime borrowers.
Auto Loan Terms with a 590 Credit Score
On top of higher interest rates, expect less favorable loan terms if your credit score is around 590. Here are some of the common restrictions lenders may impose with a subprime auto loan:
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Lower Max Loan Amount – Most lenders cap max loans at 100-115% of the car’s value with subprime scores.
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Higher Down Payment – Plan on at least 10-20% down for 590 credit score auto loan approval. Some lenders require 25% or more.
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Shorter Term Length – Subprime loans may cap terms at 4-5 years versus 6-7 on prime loans.
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Additional Fees – Application fees, origination fees, and other charges are common with subprime car loans. Shop around for lower fees.
Meeting the lender’s loan conditions can improve your 590 credit score auto loan chances. Coming up with a larger down payment and keeping the loan amount low relative to the car value is advised to offset the higher risk.
How to Get a Car Loan with a 590 Credit Score
If your credit score is around 590, here are some tips for getting approved and financing a new car:
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Shop subprime lenders – Specialty lenders like Auto Credit Express, MY Auto Loan, and Complete Auto Loans cater to subprime borrowers.
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Get prequalified – Applying for prequalification lets you check rates and see potential loan terms before committing.
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Bring a down payment – At least 10-20% down is recommended. This shows the lender you are invested in paying off the loan.
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Find a cheap car – Opting for an inexpensive used car allows you to keep the loan amount low to improve approval odds.
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Bring proof of income – Lenders will want to verify your monthly income to ensure you can afford the payments.
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Check for rate discounts – Programs like GM’s Builder Discount may knock 0.25-0.5% off your interest rate.
While a 590 credit score makes getting a great rate difficult, it should not prevent you from getting approved for some type of car loan in most situations. Do your research to find the best subprime lender for your needs.
How to Improve Your Credit Score Before Buying a Car
The higher you can boost your credit score before applying for a car loan, the better. Making some credit improvements can help you qualify for prime lending and much lower interest rates.
Here are some tips for improving your credit score quickly before buying a car:
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Pay down credit card and loan balances – Lower balances help your credit utilization ratio.
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Become an authorized user on a spouse or family member’s credit card if they have excellent credit and low balances. Their credit history can raise your scores.
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Dispute any errors on your credit reports that may be dragging your score down unfairly.
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Avoid new credit applications in the months preceding your auto loan application. Too many hard inquiries can ding your score temporarily.
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Make sure to pay all your bills on time leading up to your car loan application. Payment history is a big factor in credit scores.
Taking even a couple of months to work on credit improvement can bump your score into the low 600s and make a big difference in auto loan rates and terms. Patience has its benefits when trying to get approved for a car loan with less than stellar credit.
The Bottom Line
A credit score of 590 is considered subprime and will lead to higher car loan rates from most lenders. But approval is definitely possible in many cases, especially if you meet the lender’s down payment and income requirements.
Taking some time to boost your credit score, shop multiple lenders, and come prepared with a down payment are keys to getting the best possible auto financing with a 590 credit score. While you may pay higher rates, a 590 credit score should not stand in the way of securing an auto loan if you do your homework.
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:
How credit scores affect auto loans
Lenders use your credit score, along with other factors like your income and debts, to determine how likely you are to repay a loan. The higher your credit score, the less risk lenders think you pose. This means that you are more likely to receive more competitive auto loan rates and better terms.
- Better interest rates. A good to excellent credit score — either in the prime or super prime category — will help you secure a competitive interest rate on your car loan.
- Smaller down payment. With the added layer of good credit, you can likely avoid making a large down payment, although it’s a good idea to put down as much as you can afford to reduce overall costs.
- Higher chance of approval. A higher credit score means that lenders view you as less of a risk. The vast majority of car loans go to those with scores above 661.
How to buy a car with Bad Credit. Car buying Tips
FAQ
Is 590 a good credit score to buy a car?
Can I get a car loan with 590 credit?
While there’s no set minimum score to get a car loan, the majority of borrowers have scores above 660. Borrowers with scores of 501 to 600 accounted for just 15.70% of cars financed in the second quarter of 2024, according to Experian.
What credit score is needed for a $30,000 car loan?
What can you get with a 590 credit score?
| Type of Credit | Do You Qualify? |
|---|---|
| Secured Credit Card | YES |
| Unsecured Credit Card | YES |
| Home Loan | YES (FHA Loan) |
| Personal Loan | MAYBE |