What Credit Score Do Car Finance Companies Look At?

If you're thinking about getting a car on finance, you’ve probably heard that your credit score matters. But how much? And what number do car finance companies actually care about? It’s not just one number - it’s a mix of factors, and knowing what they’re looking for can make the difference between getting approved with a good rate or being turned down or stuck with sky-high interest.

What Credit Score Do Car Finance Companies Use?

Car finance companies in Ireland don’t use a single universal score. Instead, they pull your credit report from one or more of the three main credit reference agencies: Credit Info, Experian, and Equifax. Each agency calculates your score differently, so your number might vary slightly between them. But lenders typically look at the middle score if they check all three.

For example, if Experian gives you a score of 720, Credit Info gives you 680, and Equifax gives you 700, the lender will likely use 700 as your reference point. Most car finance providers in Ireland use a scale from 300 to 850, where anything above 700 is considered good, and anything below 600 is seen as high risk.

It’s not just about the number, though. Lenders also look at what’s behind it - your payment history, how much debt you have, and how long you’ve had credit accounts open. A score of 650 with ten years of on-time payments and no defaults will often look better to a lender than a 710 score with three recent missed payments.

What’s the Minimum Credit Score for Car Finance?

There’s no official cutoff, but most lenders won’t even consider applications below 580. That doesn’t mean you can’t get finance if your score is lower - it just means you’ll have fewer options and pay more.

Here’s a rough breakdown of what you can expect based on your score:

• Below 580: Very limited options. You might need a co-signer, a large deposit, or a subprime lender. Interest rates can be over 15%.
• 580-659: Possible approval, but expect higher interest rates (10-14%). Fewer lenders will offer you long-term deals.
• 660-719: Good chance of approval. Rates typically between 6-9%. You’ll have access to most mainstream lenders.
• 720-850: Excellent. You’ll qualify for the lowest rates (as low as 3-5%), longer terms, and better deals like 0% APR promotions.

These ranges aren’t set in stone - some lenders, especially those targeting first-time buyers or people with thin credit files, might be more flexible. But the trend is clear: the higher your score, the better your deal.

Why Does Your Credit Score Matter So Much for Car Finance?

Car loans are one of the most common types of secured credit. The car itself is collateral - if you stop paying, the lender can repossess it. But that doesn’t mean they’re not taking a risk. They’re betting you’ll make 48 to 72 monthly payments on time. Your credit score is their best predictor of whether you’ll do that.

Think of it like this: if you’ve consistently paid your phone bill, electricity, and credit card on time for years, a lender sees you as predictable. If you’ve missed payments, gone over limits, or had defaults, they see you as unpredictable - and unpredictable borrowers cost more to insure.

That’s why a person with a 750 score might get a €25,000 car loan at 4.2% APR over five years, paying €468 a month. Someone with a 620 score might get the same car at 11.5% APR, paying €572 a month. Over five years, that’s over €6,000 extra in interest - just because of a 130-point difference.

What Else Do Car Finance Companies Look At?

Your credit score is just one piece of the puzzle. Lenders also check:

• Income and employment: Do you have a steady job? Are you self-employed? Lenders want proof you can afford the payments - usually asking for three months of payslips or bank statements.
• Debt-to-income ratio: How much of your monthly income goes to debt? If you’re already paying €1,200 in rent, €300 on a student loan, and €200 on credit cards, adding €500 for a car might push you over their limit.
• Deposit size: Putting down €2,000 or more can make a big difference. It lowers the loan amount, reduces risk for the lender, and can get you a better rate.
• Length of credit history: If you’ve only had credit for a year, you’re seen as a higher risk, even if your score is decent. Lenders like to see at least two years of active credit use.
• Recent credit applications: Applying for five loans in a month screams financial stress. Each hard inquiry knocks a few points off your score, and multiple ones in a short time can trigger a red flag.

Some lenders also check your address history. Moving often or living at the same place for less than a year can make them nervous - even if your score is perfect.

How to Improve Your Credit Score Before Applying

If your score is below 650 and you’re planning to buy a car soon, you have time to improve it - but you need to act now.

1. Check your credit report - get free copies from Credit Info, Experian, and Equifax. Look for errors like accounts you don’t recognize, late payments that were actually on time, or debts that were paid off but still listed as outstanding.
2. Pay everything on time - even one missed payment can drop your score by 80 points. Set up direct debits if you have to.
3. Reduce your credit card balances - try to keep your usage below 30% of your limit. If you have a €5,000 limit and owe €4,000, pay it down to €1,500 or less.
4. Don’t open new accounts - avoid applying for credit cards or personal loans in the six months before you apply for car finance.
5. Register on the electoral roll - in Ireland, this helps lenders confirm your identity and address. If you’re not registered, do it now.

These steps won’t fix your score overnight, but in three to six months, you could see a 50-100 point jump - and that could save you thousands on your car loan.

Can You Get Car Finance With No Credit History?

Yes - but it’s harder. If you’ve never had a credit card, loan, or mobile phone contract, lenders have nothing to judge you by. This is called a ‘thin file’.

Some lenders offer ‘first-time buyer’ deals, but they usually require:

• A larger deposit (20-30% of the car’s value)
• A co-signer with good credit
• Proof of steady income over 12 months
• A guarantor who agrees to pay if you can’t

Another option is to start building credit before applying. Get a credit-builder loan (small, short-term, with fixed payments), or apply for a secured credit card. Pay it off in full every month. After six to twelve months, your score will improve, and you’ll have a track record to show lenders.

What Happens After You Apply?

Once you submit your application, the lender does a hard credit check. That means your score will drop a few points - but only temporarily. If you’re approved, you’ll get a formal offer with your interest rate, monthly payment, and loan term.

Don’t accept the first offer you get. If you’ve been approved by two or three lenders, compare them. Look at the APR (annual percentage rate), not just the monthly payment. A lower monthly payment with a longer term might cost you more in the end.

Also, ask if the rate is fixed or variable. Fixed means your payment won’t change. Variable means it could go up if interest rates rise - which is risky if your budget is tight.

Final Thoughts

Your credit score isn’t the whole story, but it’s the biggest factor in what you’ll pay for your car. You don’t need a perfect score to get finance - but you do need to understand what lenders are looking for. If your score is low, don’t give up. Take control. Fix errors, pay down debt, and wait a few months. A little patience can save you thousands.

And if you’re unsure where you stand, get your credit reports. Know your number. Know your options. Then walk into the dealership - or log into the lender’s site - with confidence.