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Can I get a car loan with a 656 credit score?
I’m in need of a new car after my last one finally gave out on me. I went to Credit Karma to see my credit report and I have a 656 credit score. Is a 656 a good enough credit score for a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You can almost certainly get a
car loan
with a 656 credit score. However, you’re at the top edge of a nonprime credit score, which means your interest rate is going to be higher than other borrowers.The magic number here is 660. If you can get your credit score up to 660, you stand to get a much better interest rate. This is due to entering the prime range of lending, which entitles you to lower interest rates than nonprime lenders.
If you want to improve your credit score those extra four points, pay off any delinquencies on your credit report and pay down any high-interest debt. You should also look at your debt-to-income ratio (DTI). This ratio is your monthly debt divided by your pre-tax monthly income. Shoot for a rate of 43% or lower to increase your chances of car loan approval.
If you can reach a 660 credit score, shop around for car loans and then apply for preapproval. Preapproval will give you an estimate of how much you can spend, your estimated monthly payment, and your interest rate. This can help you budget for a car and find the right model.
In the instance that you can’t wait to get a car and you keep getting denied, ask a friend or family member to cosign for the loan. This should increase your chances of approval and may even get you a lower interest rate.
Once you’ve found the car of your dreams, don’t forget about car insurance. Lenders require full coverage car insurance to protect the vehicle, which can get rather expensive if you don’t shop around. That’s when the
Jerry
app can help.Jerry is a licensed insurance broker that provides quotes from dozens of top-rated and well-known car insurance companies. After you find a great rate, Jerry can help you buy insurance and cancel your old policy. Customers save an average of $887 per year!
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- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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