Can I Get a Car Loan With a 500 Credit Score in Waco?

Yes, you can get a car loan with a 500 credit score. Many lenders, including those who work with subprime and deep subprime borrowers, offer financing options for people in this situation.

At Waco Hyundai, we work with buyers across the credit spectrum. Our finance department connects you with lenders who understand that a bad credit score doesn't tell your whole story. If you have stable income and a willingness to work the process, there's a real path forward.

What Is a 500 Credit Score?

A FICO score of 500 falls in the poor credit range. Most scoring models go from 300 to 850, and anything below 580 is generally considered bad credit.

Here's a quick breakdown of FICO ranges:

  • Deep subprime: 300–500

  • Subprime: 501–600

  • Near prime: 601–660

  • Prime: 661–780

  • Super prime: 781–850

A credit score of 500 puts you at the lower edge of subprime lending. That affects your loan terms, your annual percentage rate, and which providers are willing to work with you.

Why Your Credit Score Affects Your Auto Loan

Your credit history tells lenders how reliably you've paid back debt. A low score signals higher risk, which usually means:

  • High interest rates to offset that risk

  • Shorter or stricter loan terms

  • Possible requirements for a co-signer

  • Requests for a larger down payment

Your credit report is pulled from a credit bureau like Experian during the application process. Lenders also look at your debt-to-income ratio and payment history to decide on loan approval.

What Types of Lenders Work With Low Credit Scores?

Not all lenders are the same. Here are common options for a borrower with a low credit score:

  • Dealership financing: Many dealers, including Waco Hyundai, have relationships with multiple lenders and can shop your application for the best fit.

  • Credit unions: Member-owned and often more flexible with lower credit scores than big banks.

  • Online lenders: Some online lenders specialize in bad credit car loans and can give you loan offers quickly.

  • Buy here pay here: A buy here pay here lot handles in-house financing directly, which may mean looser requirements but often comes with very high interest rates.

Working with a car dealership that has established lender relationships is often your best shot at favorable terms.

New Car vs. Used Car With Bad Credit

You can apply for both new car loans and used car loans with a 500 credit score. That said, there are some key differences.

Used vehicles tend to have lower price tags, which means a smaller loan amount and lower car payments. That can make loan approval more realistic for a bad credit buyer.

New cars cost more upfront, but they come with perks like better warranties and the latest features. At Waco Hyundai, our new inventory includes competitively priced models, and we back every new Hyundai with America's Best Warranty.

Tips to Improve Your Approval Odds

You can't change your FICO score overnight, but you can take steps to strengthen your application right now:

  • Save for a larger down payment. More money down reduces the loan-to-value ratio and shows lenders you're committed.

  • Add a co-signer. A co-signer with strong credit can help you qualify and may lower your interest rates.

  • Prequalify before you shop. Use a prequalification tool to get a sense of your loan options without a hard pull on your credit report.

  • Check your credit report first. Errors on your report can drag down your score. Pull it from Experian or another credit bureau and dispute anything inaccurate.

  • Limit new credit card applications. Each hard inquiry can ding your score a few points.

What to Expect From Your Loan Terms

With a 500 credit score, expect your auto loan to look something like this:

  • Higher interest rates, often between 14%–25% APR depending on the lender

  • Longer loan terms that may lower monthly payments but increase total interest

  • Stricter requirements around stable income proof

  • Possibly a minimum down payment requirement

The loan-to-value ratio matters here too. If you're buying a used car that has depreciated significantly, some lenders may be cautious about financing the full amount.

Can You Refinance Later?

Yes. Getting pre-approved now with less-than-perfect credit doesn't lock you in forever. Once you've made consistent loan payments for 12 to 24 months and your credit improves, you can refinance into a loan with lower interest rates and better terms.

Think of your first auto financing deal as a stepping stone. Make your payments on time, and you'll build the payment history that gets you closer to good credit territory.

Shopping for a Car in Waco With Bad Credit

At Waco Hyundai, we don't turn people away because of a rough credit past. Our team works hard to find solutions that fit your budget.

Some popular options our customers love:

You can also explore our full lineup and meet our staff before you ever set foot on the lot.

FAQs

What is the minimum credit score to get a car loan?

There's no universal minimum credit score for a car loan. Many lenders will work with scores as low as 500, though your options narrow and loan rates go up the lower your score is.

Will getting pre-approved hurt my credit score?

Prequalify options typically use a soft pull, which won't affect your score. A formal pre-approved application involves a hard inquiry, which may cause a small, temporary dip.

Is it better to get financing through a dealership or a credit union?

Both have pros and cons. A credit union may offer lower interest rates to members. A dealership can shop multiple lenders at once, which saves time and may get you competitive loan offers faster.

Can I trade in my current car to help with a bad credit loan?

Yes. A trade-in reduces the amount you need to finance, which lowers your loan amount and can improve your approval odds. Bring your trade-in to Waco Hyundai and we'll give you a fair evaluation.

How do I know if I qualify before coming in?

You can reach out to our finance department ahead of time to start the conversation. We'll walk you through the process and let you know what to expect.

Ready to Get Started?

We encourage you to come see us at Waco Hyundai and let our team help you find a path to ownership. Doesn’t matter if your credit is perfect or a work in progress, we're here to help. 

Schedule your test drive today, or contact us to talk through your auto financing options. We’d love to help you drive home in something you're proud of.