Is 666 a Good Credit Score for a Car Loan?

Getting a car loan when you have less than ideal credit can be intimidating. You may be wondering if your credit score of 666 is good enough to qualify for an auto loan. The answer is that while 666 is considered fair credit, you can likely still get approved for a car loan, albeit potentially at a higher interest rate. In this article, we’ll break down everything you need to know about getting a car loan with a 666 credit score.

What is Considered a Good Credit Score?

The most commonly used credit score model is the FICO score which ranges from 300 to 850. In general, the higher the score the better. Here’s how FICO credit scores break down

• 800 and above: Exceptional
• 740-799: Very good
• 670-739: Good
• 580-669: Fair
• Below 580: Poor

So with a score of 666, you fall into the fair range, which is the second lowest tier. But you are only a few points away from a good credit score of 670. While a higher score is ideal when applying for a loan, 666 is still an acceptable score. Many lenders will work with you, especially if you have a solid down payment.

What Credit Score is Needed to Buy a Car?

There isn’t one specific minimum credit score needed to qualify for an auto loan. Lenders all have their own standards when it comes to creditworthiness. That said, according to Experian, 66% of auto loans go to borrowers with credit scores of 661 or above.

While your interest rate will be higher with a 666 credit score compared to someone with excellent credit, you should still be able to find lenders willing to finance your loan. Bringing a large down payment to the table will also help offset your lower credit score.

What Interest Rate Can I Expect with 666 Credit?

Your interest rate will depend on several factors, primarily your credit score and history. According to data from Experian, here are the average new and used car loan rates by credit score tier:

Credit Score Range – Average New Car Loan APR – Average Used Car Loan APR

• 781-850 – 5.18% – 6.82%
• 661-780 – 6.70% – 9.06%
• 601-660 – 9.83% – 13.74%
• 501-600 – 13.22% – 18.99%
• 300-500 – 15.81% – 21.58%

With a 666 credit score, you can expect an APR around 9-10% for a new car and 13-14% for a used car. While not ideal, those rates are still manageable. You can use an auto loan calculator to estimate your monthly payments at different rates and loan terms.

The most important thing is to shop around and compare offers from multiple lenders. Getting pre-approved can help you know what terms you qualify for before setting foot in the dealership.

Tips for Getting Approved with a 666 Credit Score

If you have fair credit, here are some tips to boost your chances of getting approved for an auto loan:

• Make a large down payment: Putting down 20% or more can make lenders see you as less risky.

• Consider a shorter loan term: Opting for a 3-year loan instead of 5-year reduces the lender’s risk.

• Bring proof of income and residency: Solid employment and housing history helps overcome credit issues.

• Get a co-signer: Adding a cosigner with good credit improves your chances. Just make sure they understand their financial obligations.

• Try your bank/credit union: Local lenders are more likely to extend financing to existing members.

• Improve your credit first: Pay down debts or get added as an authorized user to help boost your score.

Steps to Improve Your Credit Before Applying

If your score is on the low side, taking some time to improve it before applying for an auto loan can really pay off. Not only will you qualify for lower interest rates, but you’ll also likely get approved for more money. Here are some important steps:

• Pay all bills on time: Payment history is the biggest factor in your credit scores. Stay current on all accounts.

• Pay down credit card balances: High balances hurt your credit utilization ratio. Try to keep it below 30%.

• Avoid new credit applications: Too many hard inquiries in a short timeframe can ding your credit.

• Review credit reports for errors: Dispute any inaccurate information that may be dragging your score down.

• Become an authorized user: Get added to a creditworthy person’s account. Their good history can help yours.

• Open a secured credit card: Making on-time payments helps demonstrate you’re creditworthy.

With some diligence, you can improve your credit and be in a much better position when it comes time to buy a car. Don’t get discouraged if your score isn’t perfect. Do your research and explore all your financing options. With a 666 credit score, car loan approval is within your reach.

Average auto loan interest rates by credit score

To qualify for a $30,000 car loan, a credit score of 660 to 700 is generally recommended by lenders. However, lenders also consider your debt-to-income ratio, making your overall financial situation a key factor in loan approval.