Car Loans | Virginia Credit Union (2025)

FAQs

What credit score do credit unions use for auto loans? ›

What credit score do auto lenders look at? The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.

In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan. However, the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.

Because credit unions are nonprofit organizations, Members can typically enjoy lower interest rates compared to banks. In fact, depending on how much you borrow for your car, you could save thousands of dollars over the life of the loan compared to a loan from a bank.

According to Credit.com, Edmunds, and Bankrate, shopping around for the best terms and interest rates for an auto loan or mortgage counts as a single hard inquiry.

A credit score of 500 is considered poor credit, and lenders will likely see you as a higher risk borrower. You might also have a higher interest rate and may need to provide a larger down payment to finance a car.

While you technically can get approved for a loan with a 550 credit score, you'll likely face more challenges and pay significantly more for the loan than if your score was higher. Most lenders won't consider borrowers with scores less than 580 – but you may still be able to find one if you know where to look.

What minimum credit score is needed to buy a car? There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.

Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.

Credit score: You might need a credit score of at least 740 to be considered for a 0% APR loan. The minimum credit score depends on the dealership and the car you're interested in purchasing.

Eligibility requirements for personal loans from credit unions are less strict than a bank's criteria. In particular, a low credit score may not disqualify you from a loan with a credit union, because a credit union is more likely to take into account your overall financial circumstances.

Is it better to go through your bank for a car loan? ›

But is it better to get a car loan through a bank or a dealer? You will generally be better off with a loan from a bank, credit union or online lender. Not only will this give you negotiation leverage, but you'll likely find a better deal on interest.

While dealerships make their own financing programs seem attractive, it's always a good idea to shop around for the best auto loan rates – starting with local credit unions. Credit unions are often able to provide better rates and service than commercial banks.

How fast will a car loan raise my credit score? There's no set time frame for how long it takes a car loan to improve your credit score. After buying a car, you can expect to see your score improve after making monthly payments on time and paying down your loan balance.

As such, it's not something you should expect to affect your credit score much—it certainly won't wreck it. While yes, getting pre-approved for an auto loan does involve a “hard credit inquiry”, the impact on your credit score is minor.

When you use an auto loan to buy a car, your credit score will likely take a slight hit due to the increase in your debt load and the hard inquiry that results when the lender checks your credit. Thankfully, the credit score should only dip a few points temporarily.

FICO® Scores are the credit scores used by most lenders, and different lenders may use different versions of FICO® Scores.

FICO score 8 and 9 are commonly used for student loans, personal loans, medical loans, credit card lines and auto loans. However, there are industry-specific FICO versions for certain types of debt as well, including auto loans, credit cards and mortgage lending.

There is no minimum credit score required to be approved for car finance for a number of reasons: – Different finance providers will use different third-party credit reference agencies to retrieve your credit score. A person's credit score will be different across providers as their scoring systems are unique.