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What credit score is needed for a car loan in Canada?


Do you want to purchase a car with an auto loan in Canada? Then you need to be thinking about the minimum credit score required. For instance, banks won’t process your loan request if you have a negative credit score.

So, what credit rating do you need for a car loan in Canada? Read on to find out.

What Credit Score is Needed for a Canadian Auto Loan?

When it comes to auto loans in Canada, the acceptable credit score range will differ with different lenders. However, you don’t want a score that falls below the bare minimum.

In Canada, credit scores can range from 300 to 900 points. Any score above 650 is considered an excellent score and will probably garner you a car loan with ease. A score ranging from 560 to 650 is thought to be a fair rating. This score will make it a bit more difficult to secure a loan with the average financial institution and may result in a higher interest rate. Lastly, if your score is below 560, you’ll find it very challenging to secure a car loan in Canada.

Can You Get a Loan with a Bad Credit Score?

You can get a loan with a bad credit score, but it requires a bit more leg work. If your score is under 600 or even just above 300, there are lenders out there who will take you on. However, securing a loan with these lenders will likely require a cosigner, a down payment, or a higher interest rate.

How to Enhance Your Credit Score to Get Better Loan Terms

If you’re not satisfied with your loan terms and these terms are the result of your poor credit score, you should work to improve your score.

One thing you can do to improve your score is to make sure all your bills are being paid on time. If you can’t make the minimum payment on all your accounts at once, you might want to consider consolidating your debt with a consolidation loan, a line of credit or refinancing your home. This will give you one payment to make. Make sure you make this payment on time as late payments, even occasional ones, can severely impact your credit score. If you’re worried about forgetting about payment, you can always set up automatic payments with your bank.

Another thing you can do is make sure that you don’t take on any new debt. As you pay down your debt, your available credit will increase. This is known as a credit utilization rate. A low utilization rate will help improve your score.

You won’t improve your score overnight, but if you pay down your debt steadily and don’t take on any new debt, things will improve gradually.

Final Steps

If you’ve been working steadily to improve your credit and you’re ready to get a car loan, then you need to check to see that your credit rating has improved. You can get a credit report for free in Canada, but if you need a credit score for a car loan, it will cost you around $10. To request a credit report, you will need to contact Equifax or TransUnion.

Be sure to look over this report carefully to make sure there have been no errors. Also, keep in mind that it can take several weeks for a change to appear on your credit report.


It can be challenging to get a car loan in Canada if your credit score is below 650. However, all is not lost. You do have options. You can either work on improving your credit score by making regular debt repayments and not taking on any new debt. You can also try to find a lender who specializes in working with people with poor credit scores. However, it should be noted that these lenders tend to offer higher interest rates and might require a cosigner or a down payment.

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