How to Get a Car Loan with a 550 Credit Score

When you have bad credit – say, a credit score around 550 – getting approved for a car loan can be difficult. While you should try for a pre-approval with your bank or credit union, you more than likely are going to need a subprime lender. These lenders work exclusively with bad credit car buyers, and are able to offer financing to many of them. We can help you get connected to one, but first we want to explain just what you need to do to get a bad credit auto loan.

4 Things to Keep Track of When Financing a Car

Subprime lenders work through special finance dealerships, and offer car loans to borrowers struggling with credit issues. These lenders run credit checks, but consider outside factors to determine approval. You need to have the proper documentation ready before you head to the dealer, such as proof of income, proof of residence, and proof of a working phone.

Also, you need to keep track of these four things before you start the financing process:

  1. How to Get a Car Loan with a 550 Credit ScoreCredit scores and reportsKnow where your credit score stands, and what’s on your credit reports. You’re entitled to a free copy of your credit report every 12 months from the three major credit bureaus by visiting As for your credit score, most lenders look at your FICO score, and if your bank or credit card company doesn’t offer a free FICO check, you can see yours for a fee at
  2. Finances – Know what your budget is, and how much you’re willing and able to spend on a vehicle. You need to consider additional expenses of car ownership, such as fuel, insurance, and maintenance.
  3. Interest rates – Look up the current interest rate trends, and see what people with your credit score range are getting. You should, if possible, also rate shop to see what different lenders are willing to approve you for so you can pick the best offer.
  4. Down payment – A down payment is usually required with a bad credit auto loan. The minimum amount needed varies, but most subprime lenders ask for a down payment of at least $1,000 or 10% of the vehicle’s selling price, whichever is less.

How to Increase Your Approval Odds

As long as you meet the lender’s minimum requirements, you shouldn’t have an issue getting approved for a loan. However, if possible, you should try to increase your approval odds. Two common ways to do this include:

  1. Adding a cosigner – Not all subprime lenders require a cosigner, but having one on hand doesn’t hurt. Adding a cosigner to a car loan could get you a better interest rate and make the overall cost of the loan cheaper. Your potential cosigner must have good credit and a qualifying income.
  2. Making a larger down payment – We recommend that you make the largest down payment you can comfortably afford if you have bad credit. The reason why is because you end up saving money, and this can really make a difference considering borrowers with bad credit typically qualify for higher interest rates. You can use cash, trade-in equity, or a combination of both to come up with a down payment.

The Bottom Line

If you have a 550 credit score, you may still be able to get approved for an auto loan. In addition to the right documents, a possible cosigner, and larger down payment, you also need to work with the right lender. The Car Connection is here to help you find financing.

We work with a nationwide network of dealerships that have the lending resources available for people struggling with credit. Get started today for free by filling out our car loan request form.

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