Yes, you can get a car with a 490 credit score, but it will be challenging, requiring a higher down payment, a much higher interest rate (often double digits), and a focus on "buy here, pay here" lots or lenders specializing in deep subprime loans, though some online lenders and CarMax might work. Approval depends heavily on stable income, and it's crucial to find a vehicle you can truly afford given the high costs, with options like Byrider or CarMax offering paths.
Someone with a FICO score of 580 or less is generally considered a high-risk applicant. You may still get approved for financing, but you'll likely be offered a higher interest rate and less favorable terms. That said, lenders look at other factors, too, such as your income and other debts you have.
Long-Term Strategies (6-12 Months)
The best strategies for raising your credit score 100 points or more are long-term strategies. These usually take six to 12 months to get results. If you're in the good-to-excellent credit score bracket — over 700 — you are already doing many things right.
There's no single lowest score, but many lenders look for at least a 500-600 FICO score; however, you can get financing below 500 (deep subprime), though it means much higher interest rates, limited options, and a greater need for a large down payment or co-signer, with options often starting around 500-580 for subprime/deep subprime. Dealerships work with different lenders, so approval depends on your overall financial picture (income, debt, down payment), not just the score.
A $25,000 car loan payment varies significantly but generally falls from around $400 to over $700 monthly, depending on the loan term (3-7 years), interest rate (APR), and if you have a down payment, with shorter terms and higher rates meaning higher payments, while longer terms or good credit (lower rates) reduce monthly costs. For example, a 5-year loan might be about $494/month, but a 3-year loan could be over $770/month, even with similar rates.
Reducing your balances is the most effective way to boost your credit score. Provided you have no derogatory marks on your credit reports, such as late payments or delinquencies, you are likely to see a jump in your scores quickly if you knock down your balances to or close to zero.
Credit Rating: 597 is considered a poor credit score. Borrowing Options: Most borrowing options are available, but the terms are unlikely to be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan, but the interest rate is likely to be high.
The 2-2-2 credit rule is a guideline for building strong credit, suggesting you should have two active credit accounts (like cards or loans) for at least two years, with consistent on-time payments for those two years, often with a minimum credit limit of $2,000 per account, to demonstrate financial responsibility to lenders, especially for mortgages. It's a benchmark to show you can handle credit well over time, reducing lender risk and improving approval odds for major loans.
Many brands and their dealers have programs that can help you get financed. Automakers such as Ford, Kia, and Hyundai are known for working with borrowers who have lower credit scores. In addition, CarsDirect has a network of dealers that specialize in bad credit car loans whether you're considering a new or used car.
For a $30,000 car, a good down payment is generally $6,000 (20%) for a new car or $3,000 (10%) for a used car, which lowers your loan, monthly payments, and interest, while helping you avoid negative equity. If you can't afford that, put down as much as possible without depleting savings, as any amount reduces your loan and risk, but aim for at least 10-20% if you can.
The best times to buy a car are the end of the calendar year (Oct-Dec) for major discounts on outgoing models and meeting quotas, the end of the month/quarter for salespeople to hit targets, and January/February for lingering year-end deals and an influx of used lease returns, especially for EVs. Holiday weekends (Memorial Day, Labor Day, Black Friday) and slower days like rainy weekdays also offer opportunities for better deals.
If your credit score is lower than you'd like, here are some ways to improve your credit score.
The 15/3 credit card payment method is a strategy to potentially boost your credit score by making two payments per billing cycle: one about 15 days before your statement closes (to lower reported utilization) and another around 3 days before the payment due date (to cover the rest and avoid late fees), though its actual impact on credit scoring is debated. It works by keeping your reported balance lower when the card issuer reports to bureaus, but experts note the specific timing isn't magical, and focusing on the reporting date is key.
Credit scores range from 300 to 850, so the lowest possible score is 300. 💡 While it's pretty rare to have a score of 300, about 13% of Americans have a “poor” credit score according to Experian. A poor score is 300–579 on the FICO scale.
It may be easier to secure a loan for a new car than it is for a used car, and new car loans often come with lower interest rates. Used cars can be a good fit if you're on a budget and they generally cost less to insure; however, interest rates for used car loans are often higher than for new car loans.