Can You Get an Auto Loan with Bad Credit? Here’s What to Know
If you have bad credit, getting approved for an auto loan can feel like an uphill battle. But the good news? It’s not impossible. In fact, many people with less-than-perfect credit still get the vehicles they need—with the right information and the right lender.
At Northwoods Credit Union, we understand that life happens. Credit scores can dip for many reasons—medical bills, job changes, or missed payments—and we’re here to help you move forward, not judge your past.
Here’s what you need to know about getting an auto loan with bad credit, and how you can prepare to get behind the wheel.
What Is Considered “Bad” Credit?
Lenders use your credit score to measure how likely you are to repay a loan. In general:
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300–579: Poor credit
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580–669: Fair credit
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670–739: Good credit
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740–799: Very good
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800–850: Excellent
If your credit score is below 670, you may fall into the “bad credit” category for many lenders. But don’t panic—there are still options and ways to improve.
How to Improve Your Chances of Getting Approved*
Even with a low credit score, you can take smart steps to strengthen your loan application:
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Check your credit report: Look for errors that might be hurting your score. Get a feel for the scope of your credit score and areas you can improve.
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Make a down payment: The more you can pay upfront, the less risk for the lender.
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Choose a realistic vehicle: Keep your budget in mind. A lower loan amount is usually easier to get approved.
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Show stable income: Proof of steady employment can make a big difference.
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Add a co-signer: A co-signer with good credit can help you qualify or get a better rate.
What to Expect with a Bad Credit Auto Loan
When applying with bad credit, keep these points in mind:
- Higher interest rates: You may see a higher APR (Annual Percentage Rate) than someone with excellent credit.
- Shorter loan terms: Some lenders may offer shorter repayment periods to reduce their risk.
- Limited loan amounts: You may qualify for less, so be prepared to adjust your vehicle choice.
Why Consider a Credit Union Like Northwoods?
Not all lenders are the same. At Northwoods Credit Union, we take a personal, community-first approach to lending. Here’s what sets us apart:
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We review your full financial picture, not just your credit score
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We’re local to northern Minnesota, so we understand our members and their needs
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We offer competitive rates and flexible terms for qualified buyers, even with credit challenges
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Our team is here to answer your questions and guide you through the process. Our employees live and work here in northern MN, like you.
Local Tip: Build Credit While You Borrow
An auto loan can actually help you rebuild your credit—if you make on-time payments each month. That’s why it’s important to work with a lender who will set you up for success, not just approve you and walk away.
Check out our other financial blogs or resources like our free loan calculators to help you on your financial journey.
Bad Credit Doesn’t Have to Mean “No”
While bad credit can make things more challenging, it’s not the end of the road. With preparation and the right lending partner, you can still drive away with a reliable vehicle—and maybe even improve your credit along the way.
Ready to Take the First Step?
If you’re in or around Cloquet, Moose Lake, or Floodwood, Northwoods Credit Union is here to help. Let’s explore your options and find a loan that fits your life.
Apply for a credit union auto loan today!
Not a member yet? See if you’re eligible to join Northwoods Credit Union.
*Not all applicants will qualify. Membership eligibility required. Insured by NCUA.