What is the Minimum Credit Score Needed to Secure a Car Loan?
What is the Minimum Credit Score Needed to Secure a Car Loan?
Posted on December 19, 2025
IN SHORT
The minimum credit score needed to secure a car loan varies by lender. Banks generally consider applications starting around 660, while specialized lenders may approve files with a lower score, or even no credit history at all. A lower rating can still lead to approval based on income, stability, and debt-to-income ratio.
What Minimum Credit Score Is Needed to Secure a Car Loan?
When buying a new vehicle, many people wonder what the minimum credit score is for a car loan. The answer depends on the lender.
The Score Ranges Used by Lenders (Equifax & TransUnion)
In Quebec, your credit score is calculated by Equifax and TransUnion. Each lender has its own guidelines, but in general, ranges are divided as follows:
- 760 and above: Excellent
- 725 to 759: Very good
- 660 to 724: Good
- 560 to 659: Fair
- Below 560: Low
What a Low, Average, or High Score Really Means
Your score reflects your credit history and helps lenders assess risk. A high score shows solid credit management and on-time payments.
An average score suggests some financial challenges or limited credit experience. A low score may be associated with significant difficulties such as bankruptcy.
Typical Thresholds: Bank vs. Specialized Lender
Banks set higher thresholds than specialized lenders. With that in mind, how do you know if a car loan will be approved in your situation? As a reminder, the minimum credit score for a car financing loan sits around 600 to 620, and up to 660 with banks.
As for specialized lenders, some have no minimum score for a car loan in Quebec. Even people without a credit score have a chance.
Can You Be Approved for a Car Loan with Bad Credit?
Why Banks Often Decline Scores Under 600 to 620
Banks often use automated systems that decline applications below a set threshold. They take on little risk.
How Specialized Lenders Assess Risk Differently
Specialized lenders take time to analyze your situation. Have you held a stable job for more than 3 months? Can you make payments with your current income? Do you have a co-signer or a down payment? These lenders assess your ability to repay without focusing solely on your score.
Why a Low Score Is Not a Barrier for Financement Automobile Montréal
Thanks to our wide network of partners, we can find a personalized solution for each person. We know anyone can face temporary challenges. We also help anyone looking at how to raise their credit score, and our tips will help boost your rating and tidy up your personal finances.
How Credit Score Influences Interest Rates
Why a High Score Gives You Access to the Best Rates
If you have a high score, lenders want to attract you to do business with them. They will, therefore, offer the best rates available. These rates increase if your file is riskier, allowing the lender to offset the risk.
Effect of Your Credit Score on the Rate by Category (Excellent / Good / Average / Low)
To start, it's worth noting that a higher score unlocks the best interest rates; loan conditions then become more favourable. Rates rise by category, but it is possible to get a reasonable rate with some specialized lenders, such as Financement Automobile Montréal.
How to Reduce Your Rate Even with Bad Credit
Several tips can help, for example:
- Have someone co-sign with you
- Provide a down payment
- Show that you have stable, sufficient income
- Choose the shortest term possible
What Other Factors Can Offset a Low Credit Score?
Income and Job Stability
Lenders consider your current income, not just your past. Stability pays off.
Down Payment: How it Reduces Risk
For lenders, a down payment shows a serious commitment on your part and provides certain assurances.
Debt-to-Income Ratio: Why it Matters More Than Your Score
Your score reflects your past, but your debt-to-income ratio reflects your current habits. Aim to keep it under 30%, or at least below 40%.
How to Increase Your Chances of Being Approved Today
Check your Equifax and TransUnion files to make sure there are no errors, gather your documents, prepare a down payment, and avoid submitting multiple applications, as this can hurt your file. Work with a lender like Financement Automobile Montréal for quick approval.
What Are the Chances of Approval by Credit Score?
Scenario A: Score of 720 and Above
Easy approval with preferred rates.
Scenario B: Score Between 650 and 700
Acceptable credit score for an auto loan with most lenders, with slightly higher rates.
Scenario C: Score between 550 and 620
Not approved at banks and most dealerships, but approved with specialized lenders.
Scenario D: Score of 500 and below
Approval is possible with specialized lenders offering 2nd and 3rd chance credit, such as Financement Automobile Montréal.
In short, if your credit score is low, know that there are solutions for your situation. Our advisors will guide you in the right direction. Out of curiosity, how long does it take to improve your credit score in Quebec? The answer depends on several factors, but it typically ranges from 12 to 24 months. Take advantage of our practical tips to see changes.
FAQ
What score is needed to be approved for an auto loan?
With specialized lenders, like Financement Automobile Montréal, there is no minimum score for a car loan in Quebec. We accept all files.
Can I finance a car with a score of 500?
Yes, it's possible with certain specialized lenders.
What score is considered “good” for an auto loan?
At most institutions, 660 is considered an acceptable credit score for a car loan.
Is it harder to be approved for a car loan than for a credit card?
No, quite the opposite! It can sometimes be easier to get a car loan with a minimal score in Quebec.
How can I improve my score before applying for a loan?
Pay your bills on time and try to keep your debt-to-income ratio under 30%.