Having average credit doesn’t mean you can’t qualify for a car loan; it just means you need a plan. Many drivers fall into the middle range of the credit spectrum, and lenders understand that. With the right preparation, you can still get approved and secure a fair rate on your next vehicle.
Here’s how to improve your approval odds, compare auto loan rates wisely, and get pre-approved for an option that works for you.
What ‘Average Credit’ Means for Auto Loan Rates
If your credit score sits between 620 and 699, you’re considered to have average or fair credit. It’s not bad; it simply shows a mixed history of on-time payments and a few bumps along the way.
Lenders see borrowers in this range as reliable, especially if you’ve maintained a stable income and manageable debts. While you might not qualify for the absolute lowest interest rate, approval is still very achievable. In fact, many auto lenders specialize in helping drivers with bad credit finance used cars.
Your score is only one piece of the puzzle. Income stability, job tenure, and a reasonable down payment can all make a big difference in your overall credit approval. Here are some tips to get you where you want to go.
1. Compare Auto Loan Rates Before You Apply
Auto loan rates can vary widely depending on the lender, the vehicle, and your credit profile. Even a small difference in interest, say, 2%, can add up to thousands over the life of the loan.
Before signing anything, compare offers from multiple lenders or let a trusted dealership like Race Auto Group do the work for you. We help customers explore competitive financing options to find a rate that fits their budget and credit situation.
2. Get Pre-Approved to Strengthen Your Credit Approval Chances
A pre-approved car loan can be one of your strongest tools when applying for financing.
The process is simple: a lender reviews your credit, income, and financial details to estimate what loan amount and rate you might qualify for. Once pre-approved, you’ll know exactly how much you can spend—avoiding unnecessary stress or surprise denials later on.
Race Auto Group offers free credit checks and no-obligation pre-approvals, helping you prepare with zero pressure.
3. Improve Your Odds of Loan Approval With Smart Preparation
Average credit doesn’t have to limit your opportunities. These small steps can help you turn a “maybe” into an easy “yes”:
- Pay down smaller debts. Reducing your balances lowers your debt-to-income ratio and can help rebuild your credit score.
- Show consistent income. Bring proof of employment or pay stubs to demonstrate financial stability.
- Make a modest down payment. Even 5–10% can improve your loan terms and reduce monthly payments.
- Avoid multiple hard inquiries. Too many applications in a short time can temporarily lower your score.
4. Choose Loan Terms That Work in Your Favour
The right car loan term can make a big difference in your financial comfort.
- Shorter terms (36–48 months): Higher monthly payments but lower overall interest.
- Longer terms (60–72 months): Lower monthly payments but more total interest paid.
Aim for a balance that fits your monthly budget while minimizing costs over time. At Race Auto Group, we help you review both options side by side, so your financing feels realistic and sustainable.
5. Avoid Common Mistakes That Hurt Your Credit Approval
A few avoidable missteps can stand between you and an easy approval. Keep these in mind before applying:
- Don’t apply to too many lenders at once. Each hard inquiry can affect your score.
- Avoid overextending your budget. Choose a vehicle and loan size that’s realistic for you.
- Don’t skip a co-signer if needed. A strong co-signer can instantly improve your chances.
- Always review your credit report. Fixing errors can quickly raise your score by several points.
Being proactive shows lenders that you’re organized, responsible, and prepared for long-term success.
Get Approved With Help From Race Auto Group
Getting approved for a car loan with average credit doesn’t have to be stressful. We make the process simple and transparent.
Our team helps drivers across Atlantic Canada find reliable used vehicles with flexible financing plans that fit their credit profile. Apply for financing today or visit us in person to take the next step toward a reliable vehicle.
FAQs
What is the minimum credit score for a car loan in Canada?
There’s no strict minimum, but most lenders prefer scores above 600. With average credit, you’re already in a strong position for approval.
Will applying for pre-approval hurt my credit score?
A pre-approval uses a soft check, so it won’t affect your score. A full application may include a hard inquiry, but it’s temporary and usually minor.
How can I get a better auto loan rate with average credit?
Compare multiple offers, make a small down payment, and consider adding a co-signer. Lenders reward lower risk with better rates.
Should I buy a cheaper car to improve my credit approval odds?
Choosing a reliable, lower-priced vehicle can increase approval chances and help you manage monthly payments more easily.
