What a 600 credit score means for car loans
A 600 credit score puts you in the subprime borrower category — lenders see you as higher risk, but you are not shut out of car loans. Most traditional banks and credit unions will decline you at 600, but credit unions, buy-here-pay-here dealerships, and subprime lenders (companies that specialize in lending to people with lower scores) will work with you. The tradeoff is real: you will pay a higher interest rate, possibly much higher, and may face stricter terms like a larger down payment or a shorter loan period.
Your score of 600 likely reflects past missed payments, high credit card balances, or collections accounts. Lenders use this history to predict whether you will repay a car loan. A 600 score does not mean you cannot borrow — it means the lender charges more to offset the risk they are taking.
Key Takeaways
- Credit unions and subprime lenders will work with a 600 credit score, but interest rates will be significantly higher than for borrowers with scores above 700.
- Down payments of 10 to 20 percent are common at a 600 score, and some lenders require proof of income or a co-signer to approve the loan.
- Buy-here-pay-here dealerships offer loans to people with very low scores but charge the highest rates and repossess cars quickly if you miss a payment.
- Checking your actual credit report before you explore helps you spot errors and understand why your score is 600, which can change your loan options.
- Paying down existing debt or waiting a few months while making on-time payments can raise your score and lower the interest rate you are offered.
Interest rates and loan terms at a 600 score
Interest rates for a 600 credit score typically range from 11 percent to 20 percent or higher, depending on the lender and the loan term. For comparison, borrowers with scores above 750 often get rates between 3 and 6 percent. On a $15,000 car loan over 60 months, the difference between a 6 percent rate and a 15 percent rate is roughly $3,000 in extra interest you will pay.
Loan terms are often shorter at a 600 score — 48 to 60 months instead of 72 or 84 months — which means higher monthly payments. A lender may also require you to carry full coverage auto insurance (not just the minimum your state requires), and some will place a GPS tracker on the vehicle or require you to use a starter interrupt device that lets them disable the car if you miss a payment.
Down payments are usually larger. Many lenders ask for 10 to 20 percent down, and some require 25 percent or more. This protects the lender if they have to repossess and resell the car.
Where to look for lenders willing to work with you
Credit unions are often the best starting point. They tend to look at your full financial picture, not just your credit score, and their rates are usually lower than subprime lenders. You must be a member to borrow, but membership is often open to anyone in a certain geographic area or profession. Call a few credit unions in your area and ask whether they work with borrowers at a 600 score.
Subprime auto lenders specialize in loans for people with lower scores. Companies like Santander Consumer USA, Westlake Services, and AmeriCredit work with scores in the 600 range. You can explore online or in person. These lenders move faster than banks but charge higher rates.
Buy-here-pay-here dealerships are the most accessible but the most expensive option. They lend directly to you, require no credit check, and let you drive the car home the same day. The catch: interest rates often exceed 20 percent, and they repossess the car when ready if you miss even one payment. Use this option only if no other lender will work with you.
Dealership financing through the car lot itself is possible at a 600 score, but the dealer will mark up the rate significantly. Dealers often work with subprime lenders behind the scenes and add their own markup on top.
Documents and information you will need
Lenders will ask for proof of income (recent pay stubs or tax returns), a valid driver's license, proof of residence (utility bill or lease), and your Social Security number. Some will also ask for bank statements to confirm you have money for a down payment and can handle the monthly payment.
You will need to know the vehicle identification number (VIN) of the car you want to buy, or at least the make, model, and year. The lender uses this to estimate the car's value and set the loan amount.
If you have a co-signer (someone with a better credit score who agrees to repay the loan if you do not), bring their information too. A co-signer can lower your interest rate by 2 to 4 percentage points, though they are taking on real risk.
Checking your credit report before you explore
Pull your credit report from all three bureaus — Equifax, Experian, and TransUnion — at annualcreditreport.com, which is free and federally mandated. Look for errors: accounts you did not open, payments marked late that you made on time, or balances that are wrong. Errors are common and can drag your score down unfairly.
If you find an error, dispute it with the bureau in writing. Include a copy of proof (a bank statement showing you paid, a letter from the creditor, etc.). The bureau has 30 days to investigate. Removing a false late payment or account can raise your score by 10 to 50 points.
Understanding why your score is 600 also helps you talk to lenders. If it is because you had a medical debt sent to collections three years ago but you have paid everything since, tell the lender that. If it is because you maxed out credit cards last year, that is a different story and suggests more current risk.
Steps to improve your score before explore
If you can wait a few months, raising your score even 20 to 30 points can lower your interest rate by 1 to 2 percentage points, saving you hundreds of dollars over the life of the loan. The fastest way is to pay down credit card balances. Lenders look at your credit utilization ratio — the amount you owe divided by your credit limit. If you owe $3,000 on a $5,000 limit, you are at 60 percent utilization. Paying it down to $2,000 (40 percent) can raise your score quickly.
Make every payment on time for the next two to three months. Payment history is 35 percent of your score, and recent on-time payments signal that your situation has improved.
Do not close old credit card accounts or open new ones right before you explore. Closing accounts raises your utilization ratio, and new accounts lower your average account age, both of which hurt your score.
Red flags to watch for
Avoid lenders who ask for payment upfront before you sign loan documents. Legitimate lenders do not charge process fees, processing fees, or "verification fees" before the loan is approved. If a lender asks for money before you have a signed agreement, walk away.
Be cautious of dealers or lenders who pressure you to buy a car when ready or sign papers without reading them. Predatory lenders count on you feeling rushed or ashamed of your credit score. Take the documents home, read them carefully, and ask questions about anything you do not understand.
Watch the fine print for hidden fees: documentation fees, dealer prep fees, extended warranties you did not ask for, or gap insurance bundled into the loan. These add to the total amount you owe.
Frequently Asked Questions
Can I get a car loan with a 600 credit score without a down payment?
Some subprime lenders and buy-here-pay-here dealerships will finance 100 percent of the car's price, but your interest rate will be higher — often 18 to 25 percent or more. A down payment of even 5 to 10 percent significantly lowers your rate and monthly payment, so saving for one is worth the wait.
What is the difference between a credit union and a subprime lender?
Credit unions are member-owned nonprofits and typically charge lower rates and have more flexible terms. Subprime lenders are for-profit companies that specialize in higher-risk borrowers and charge higher rates but approve faster. Credit unions may take longer to process your process but often offer better terms if you are a member.
Will getting a car loan hurt my credit score further?
A hard inquiry (when a lender checks your credit) drops your score by a few points temporarily. Taking on new debt also lowers your score initially. But making on-time car payments for six months or more will raise your score, because payment history is the largest factor in your credit score.
Should I use a co-signer if I have a 600 credit score?
A co-signer with a better score can lower your interest rate by 2 to 4 percentage points, saving you money. But they are legally responsible for the loan if you do not pay, so only ask someone you trust and who understands the risk.
What happens if I miss a payment on a subprime auto loan?
Most subprime lenders repossess the car after one or two missed payments, sometimes without warning. Some use starter interrupt devices that disable the car remotely. Read your loan agreement carefully to understand the repossession policy before you sign.