Minimum Credit Score for Car Loan Canada — What You Should Know
July 01, 2024
Introduction to Minimum Credit Score for Car Loan Canada
If you’re buying a vehicle, one of the first things to check is your credit score. Understanding the minimum credit score for car loan Canada can help you qualify for better rates, easier approval, and the right lender for your financial situation.
In this guide, FatCat Loans explains what score you need, how lenders decide approvals, and how to boost your credit if it’s not quite there yet.
Key Highlights for Minimum Credit Score for Car Loan Canada
→ The minimum credit score for car loan Canada is typically 600–650.
→ Lenders also look at income, debt, and employment stability.
→ Borrowers with lower scores can still qualify through FatCat Loans.
→ A higher score unlocks better rates and flexible terms.
Understanding Credit Scores in Canada
Your credit score ranges from 300 to 900 and shows how reliably you manage credit.
Canadian lenders use this score — from Equifax Canada or TransUnion Canada — to decide whether to approve your car loan and what interest rate to offer.
Credit scores are based on:
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Payment history (35%)
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Credit utilization (30%)
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Length of credit history (15%)
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New credit inquiries (10%)
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Credit mix (10%)
What’s the Minimum Credit Score for Car Loan Canada?
Most lenders prefer a credit score of 600 or higher, but the type of lender determines how flexible they are.
| Credit Score Range | Lender Type | Approval Odds | Interest Range (2025) |
|---|---|---|---|
| 750–900 | Prime lenders | Excellent | 6%–8% |
| 700–749 | Banks & credit unions | Strong | 8%–10% |
| 650–699 | Subprime & auto lenders | Moderate | 10%–13% |
| 550–649 | Specialty lenders | Fair | 14%–19% |
| Below 550 | High-risk / bad-credit lenders | Low | 20%+ |
Most dealerships and online platforms consider 600 the minimum credit score for car loan Canada borrowers — though subprime lenders can approve lower scores with higher rates or larger down payments.
How Car Loan Lenders Assess Applications
While your score is key, lenders also evaluate:
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Income stability: Steady pay from employment or self-employment.
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Debt-to-income ratio: Under 40% is ideal.
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Down payment size: Larger deposits lower lender risk.
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Employment history: Consistency signals reliability.
Even with fair credit, strengthening these areas can help you qualify for a better offer.
Can You Get a Car Loan with Bad Credit?
Yes — many Canadians get approved below 600, especially through lenders who specialize in bad-credit car loans.
FatCat Loans connects borrowers to trusted Canadian lenders who consider more than just your score.
Tips for approval:
✅ Provide proof of income.
✅ Offer a down payment if possible.
✅ Choose an affordable, reliable vehicle.
✅ Avoid multiple applications in a short time.
Apply today at FatCat Loans to explore flexible options.
How to Improve Your Credit Before Applying
Boosting your score can save thousands in interest:
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Pay bills on time — even small payments matter.
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Keep balances low — aim for under 30% of your credit limits.
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Avoid new hard inquiries unless necessary.
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Check reports for errors through Equifax.
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Use credit regularly and pay it off quickly.
Consistent good habits can raise your score by 50–100 points within months.
Fixed vs. Variable Car Loan Rates
When comparing offers, you’ll see fixed and variable interest options:
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Fixed rate: Same monthly payment for the full term — predictable and safe.
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Variable rate: Fluctuates with market rates; may save money if rates fall.
If you’re unsure which is best, FatCat Loans can help you compare lenders and term options before you sign.
Frequently Asked Questions (FAQs) About Minimum Credit Score for Car Loan Canada
1. What is the minimum credit score for car loan Canada?
Most lenders prefer a score of 600 or higher, but approvals are possible with lower scores through specialty lenders.
2. Can I get a car loan with no credit history?
Yes. You may need a co-signer, proof of income, or a higher down payment.
3. How long does it take to get approved?
Online approvals through FatCat Loans can happen within 24–48 hours once documentation is complete.
4. Does applying affect my score?
A single hard inquiry has a small, temporary effect. Pre-approvals often use soft checks that don’t impact your score.
5. What’s the average car loan rate in 2025?
Depending on your score, expect between 6% and 19%, with prime borrowers getting the lowest rates.
Conclusion
Knowing the minimum credit score for car loan Canada gives you an edge when shopping for financing. While lenders prefer scores above 650, even those with fair or poor credit can still qualify — especially through FatCat Loans, where lenders look at your full financial profile, not just your score.
Take time to build your credit, prepare documents, and compare offers. With the right approach, you can secure a fair, affordable car loan and drive away confidently.
🚗 Ready to get approved for your next car loan?
Apply with FatCat Loans today — fast approvals, flexible terms, and financing options for every credit score.
