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The Minimum Credit Score For a Car Loan In Canada (2024)

The Minimum Credit Score For a Car Loan In Canada (2024)

When it comes to purchasing a car in Canada, securing a car loan is often a crucial step for many individuals.


Lenders evaluate various factors to determine an applicant's creditworthiness, and one key aspect that plays a significant role in loan approval is the credit score.


Understanding the minimum credit score requirements for a car loan in Canada is essential for those looking to finance their dream vehicle.


In this article, we will delve into the significance of credit scores, shed light on the minimum requirements set by lenders, and provide insights on how to improve your credit standing to enhance your chances of obtaining a car loan.

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Is There a Minimum Credit Score for a Car Loan?

You will be pleased to know that there is no minimum credit score required to apply for a car loan. Different lenders set their own criteria to who they will accept but there is no ‘official’ minimum score.


The lower your score, the less chance you have of qualifying for a loan with particular lenders and the more interest you’ll pay. But you can still get a loan.



The team at Car Nation Canada specializes in bad credit car loans so we can definitely help.


Credit Score Ratings

There are five main tiers that credit scores are sorted into. They are:


  • Super Prime – scores of 781 to 850
  • Prime – scores of 661 to 780
  • Nonprime– scores of 601 to 660
  • Subprime – scores of 501 to 600
  • Deep Subprime – scores of 300 to 500


Source: Experian State of the Automotive Finance Market, Q2 2020.


Credit Score & Loan Interest

Your credit score doesn’t necessarily stop you from qualifying for a loan.


It may limit the lenders who will work with you though. It will also increase the interest rate you’ll pay.


There can be up to 10% difference in interest between a deep subprime loan and a Super Prime loan!


Depending on your loan, the monthly amount won’t have a huge difference, but over the term you could be paying thousands more in interest as a Deep Subprime or Subprime borrower.


Bad Credit Car Loans: Getting Approved

Bad credit car loans are for borrowers in Subprime or Deep Subprime positions.


They are specialist loans, often provided by specialist lenders used to dealing with people with less-than-perfect credit records.


Most lenders know that the vast majority of people in this position are there through no fault of their own and are willing to work to help you out.


You will pay more in interest with bad credit car loans but otherwise, they work the same as a standard loan.


Once your credit score has improved to nonprime status, you can consider a standard loan which will be cheaper. Much depends on your situation at the time.


If you’re thinking of getting a car loan and need professional advice, the team here at Car Nation Canada are always willing to help!

If you're ready for a car loan in Southern Ontario, we'd love to help with that! simply fill in the form below to get started.

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