What is the minimum credit score for a car loan in Canada
What is the minimum credit score for a car loan in Canada

What is the minimum credit score for a car loan in Canada


Buying a car is a responsible step to take. On the one hand, your budget may not allow such purchase done immediately. On the other hand, in many situations, you just cannot afford not to have a car.

Just like many Canadians, you may face this situation, and this is when financing options come in. But getting approved for a loan is not to be taken for granted – if you’ve had credit issues in the past, you’d probably want to know whether your credit score is high enough to get the car you need.

How High Is Your Credit Score?

A credit score is a practical way to represent your financial creditability in a convenient 3-digit figure based on your previous financial activities reported to the credit bureau by companies and individuals. Based on this information, you can have expectations of what loan conditions you may get. So, finding out your credit score is a good starting point.

One way to do that is through your bank, as many major banks in Canada offer this service for free to their customers. Alternatively, you can use one of the free online credit score calculators, although this will only give you an estimate idea.

Why Lenders Want to Know Your Credit Score

Before approving a car loan, lenders want to get an idea of the risks associated with lending money to a particular borrower, which is why they look at their credit score. The credit score threshold can be different from one lender to another.

Many of the banks will only accept strong credit scores, while other lenders will work with borrowers with a poor credit score.

What is the Minimum Credit Score to Buy a Car in Canada?

In Canada, the accepted credit score system has a range of 300 to 900.

What does this mean to you? Basically, the higher your credit score – the better terms you can get on a loan: the larger the amount of loan, the lower the interest rates, and lower the monthly payments. A credit score between 660 and 900 should be understood as ranging from Good to Excellent.

Very often, however, the credit score would fall into the “Fair” 630-660 range. This is where many Canadians will find themselves, and this is what most lenders will find acceptable. Credit scores below 630 will have borrowers face difficulties getting approved for a loan.

So, for a vast majority of lenders, the score of 630 can be looked at as the minimum credit score to get a car loan on more or less fair terms.

What to Do to Get a Car Loan with a Low Credit Score

So what if your credit score falls under the generally accepted minimum of 630? Although it is going to challenge you, you can still do a few things to get approved for a car loan.

For one, you can start working on improving your credit score. Start raising your credit score by paying your bills on time, staying within 30-35% of your credit limit, and having a number of various credit sources, like a credit card, mortgage etc.
Improving your credit score is going to take time.

So while you do that, you may choose a lender specializing in low credit scores. Later on, when your score improves, you can look into better loan options.

Improving Your Credit Score with a Car Loan

If your credit score happens to be quite low, then you may even consider giving up the whole car loan idea. Not only you can get the car you want, but you can start improving your credit score using your car loan. Make sure you have your payments made on time and in full.

The score will start to improve with your first monthly payment, so make use of this opportunity to take good care of your future self. It is always a good idea to invest in your better future standing.

You Can Refinance Your Car Loan

Okay, you’ve taken the first step, and now you have a car loan, perhaps not on the most appealing terms. Do you have to stay with the original loan all the way to the end? No, you don’t. Once the score is improved, you can try refinancing. What that means practically is that you can get better rates and lower monthly payments on the amount owing.

Whatever you save in the long run can be used towards your other loans, thus building even better credit.


Although there are limitations on getting approved for a car loan, the actual minimum credit score needed is fairly accessible by most Canadians. We strive to make buying cars easier for Canadians.

So, being partners with a number of large lenders in Canada, we are happy to look into your case to offer a solution that will help you achieve your goal and buy the car you want – all at your convenience “from your phone to your home”.

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