Can You Get Approved with a 500 Credit Score?
You may likely be able to get a car loan with a 500 credit score. However, you should expect to have a higher interest rate compared to a prime borrower who would get a lower competitive rate.
Your credit score is a number used by lenders to determine how likely you are to pay back a loan on time. There are two common types of credit scores: FICO and VantageScore.
Lenders typically use the FICO credit score range to determine whether or not to approve an auto loan. FICO offers Base credit scores between 300-850, as well as industry-specific scores. FICO scores that range from 670 and above are typically categorized as good. FICO Auto Scores fall between the 250-900 range. Both FICO’s Base and Auto scores are grouped similarly when determining credit quality. The VantageScore model differs from FICO in some of its criteria but is also calculated on a 300-850 scale.
Currently, FICO designates credit score tiers as:
Generally speaking, you’re likely to get better financing and interest rates if you have a higher credit score, so improving your credit can improve your chances of getting a better loan. According to Experian's State of the Automotive Finance Market report for Q1 2025, which is based on the VantageScore model, the average annual percentage rate (APR) for a new car was between 5.18% and 15.18% depending on your credit score. For used cars, the rates were between 6.82% and 21.58%.
If you have a 500 credit score, you fall into the "poor" credit range on both FICO and VantageScore models, meaning that you can expect to have the highest interest rates, since you will likely need a subprime loan from a special finance dealership. And that's where Auto Credit Express comes in.
Buying Cars for $500 Down When You Have Bad Credit
While it's possible to get a new car with a $500 down payment, many opt to purchase pre-owned vehicles because of the many benefits, including:
- Lower interest rates
- Lower amount financed
- Lower monthly payment
Financing a used car is especially attractive to borrowers with low incomes who are on a budget.
Many people think that if they have damaged credit and can only make a low down payment, they'll be stuck with a cheap used car on its last legs from a shady bad-credit car lot. Well, it doesn't matter if you have $500 down or no money down, there are plenty of good pre-owned vehicles available to people with less than stellar credit scores.
Many of the car dealerships we work with offer a great selection of late model, low-mileage, used sedans, trucks, and SUVs to pick from. And because their reputation is on the line, they make sure that all the automobiles they put out on the lot are fully serviced, safe, and reliable.
Unfortunately, our dealers and lenders have a minimum age requirement of 18 years for their Financing programs.
Tips to Improve Your Approval Odds
Having practical expectations based on your financial situation will help you make smarter choices before you begin your car search and head to the dealership. Here's what you should anticipate.
Vehicle Selection – Start by doing some research on vehicles and their values. Kelly Blue Book (KBB), Edmunds, and NADA Guide are reliable sources. Then, consider what you can realistically afford.
Keep in mind that subprime lenders will have guidelines on the type of car you can buy. Typically, lenders require that subprime borrowers purchase a car that is 10 years old or newer and has less than 100,000 miles on it. Opting for a used car can be beneficial in keeping costs down, and may require a lower down payment, though inventory can be limited.
Interest Rates – Subprime borrowers are usually considered higher risks to lenders. Therefore, depending on your current credit score and the lender, you can expect to have a higher APR on your loan. While your interest rate will depend on your credit situation and lender, people with bad credit can expect rates between 15% and 20%.
Loan Terms – In addition to higher APR, subprime borrowers might get stricter or longer loan terms on their purchase. Buyers with lower credit scores often seek longer loan terms. According to Experian, most loans for subprime borrowers range between 60 and 70 months. While a longer term can keep your monthly payment lower, you could pay more in interest in the long run. It's a good idea to take on the shortest loan you can comfortably afford.
Cosigners – Cosigners can be a big help if you only have a 500 credit score and have $500 to put down on a loan. You're more likely to get a lender to agree to a lower down payment when you have good credit. This is where a cosigner comes in. Cosigners help by "lending" you their good credit score, so that you have a better chance of approval for a car loan. They also act as peace of mind for a lender, since cosigners agree that the lender can turn to them to make payments if you miss them.
How Auto Credit Express Helps You
Getting approved for a car loan with a 500 credit score and a $500 down payment isn’t impossible – it just takes the right approach and support. With realistic expectations and the right financing partner, you can still find options that fit your needs and budget. While you may face higher interest rates or limited vehicle choices, working with specialized dealers can make the process faster and more accessible.
Auto Auto Credit Express, we make it easier to move forward:
- We work with a large network of subprime lenders
- Specialize in low down payment and bad credit financing
- Offer a fast pre-qualification process – no hard credit pull upfront
- Partner with dealerships nationwide
If you’re not sure where to start, our experts can be your guide. Let us help you find the dealer that has the financing solutions you need by filling out our fast, free auto loan request form.
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