Most auto companies — including Chrysler, GM, Ford, and Volkswagen — do not publicize information about their credit tiers for auto loans, which are slightly different than the tiers defined by major credit bureaus. In fact, Toyota is the only car manufacturer we found that publishes its credit tiers. In general, to obtain the best possible auto loan rates, you’ll need a credit score in the mid-700s. For more details about credit tiers for auto loans, as well as how to get the best rates, see below.
Credit Tiers for Auto Loans
Credit tiers determine the financing opportunities available to you when you purchase a car. Tiers vary by dealer and/or lender, and auto brands do not generally make their credit tier information available to the public.
We reached out to several auto companies, including GM, Chrysler, Ford, and Volkswagen, to ask about their credit tiers. Representatives from each company told us that they do not share this type of information. Instead, we were advised to visit a local dealership and ask about individual financing options. In general, lenders will take your full credit history into account (not just the number) when making loan approval decisions.
During our research, we found that the only car brand that publishes its credit tier system is Toyota, but it is likely that other companies have similar tiers.
Toyota’s Credit Tiers for Auto Loans
Toyota Financial Services lists specific credit tier information on its website, including the following breakdown using FICO credit scores:
- Excellent: 720 and above
- Great: 690 to 719
- Very Good: 670 to 689
- Good: 650 to 669
- Fair: 630 to 649
- Poor: 610 to 629
- Very Poor: 580 to 609
- Extremely Poor: 579 and below
If you have limited credit, Toyota Financial Services offers specific programs for qualified buyers.
General Credit Tiers
A higher credit score will typically get you better rates on loans, including auto loans. And, while companies define their credit tiers differently, Experian splits its credit tiers using the following structure (based on FICO credit score):
- Exceptional: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 699
- Very Poor: 300 to 579
Before applying for financing, it is a good idea to look over your credit report and try to resolve any errors. Each year, you can obtain a free copy of each of your full credit report through AnnualCreditReport.com. Mistakes happen, and they may lower your score enough that you fall into a lower tier. If you spot an error, you’ll need to reach out to the credit reporting bureau with supporting documentation to have it removed. The FICO website offers guidelines for this process.
How to Get the Best Auto Loan Rate
Though credit tiers for auto loans can vary significantly, there are a few general guidelines to follow that can help you get the best possible rate.
First, understand that you will likely need to have a credit score in the mid-700s to get the best rates in the top tier. Car brands set the minimum boundary for their top credit tiers differently, but all top tiers will likely have a minimum of around 740. If your credit score is around this number or higher, you can expect to receive the best rates available.
Second, if you find that you fall just below a credit tier, ask the dealer if you can be bumped up. Finance departments can typically grant such a request, especially if you’re able to provide evidence of regular on-time payments.
Finally, if you aren’t satisfied with the rate a dealership offers you, consider financing through an external bank or credit union. Bank loans can offer more competitive rates than a dealership, which means you could end up with a lower payment each month. You can also choose to shop around for third-party preapprovals — which do not require a hard credit pull — and bring your preapproval rates into the dealership. If you are able to show proof of being offered a lower rate elsewhere, the finance department at the dealership may be willing to negotiate its rate.