Credit Score Needed for a Car Loan in Australia (2026)

Quick Answer: Most mainstream car lenders in Australia prefer an Equifax score of 620 or above. Scores of 661+ (Good band) typically unlock the best rates. Below 600, you're mostly looking at specialist lenders charging 18–28% p.a. — compared to 7–10% for good-credit borrowers. If a default is holding your score down, professional removal under the Privacy Act 1988 typically takes 30–90 days and can mean the difference between an affordable car loan and one that costs thousands more than the car is worth.

A car is often not optional in Australia. If you need wheels to get to work, drive the kids to school, or run a small business, waiting years for your credit to improve isn't always practical. But blindly accepting the first loan offer you get when your credit is impaired can cost you far more than the car itself.

Here's what the credit score requirements actually look like across different lenders — and the fastest legitimate path if your score falls short.

Credit Score Thresholds for Car Loans

Car loan credit assessments tend to be faster and more automated than home loan assessments — which means score thresholds matter more and human discretion matters less. A score that might get a sympathetic underwriter on a home loan gets an algorithm on a car loan.

The Real Cost of a Low Credit Score on a Car Loan

On a $30,000 car loan, the difference between good credit rates and specialist rates is over $13,000 — nearly half the car's value again. For a $50,000 vehicle, the premium climbs further still.

Real Case Study: Marco, Canberra — Score Lifted 221 Points, Car Loan Rate Halved

Marco, 34, a building inspector from Canberra, needed a $42,000 commercial vehicle for his inspection business. He'd been quoted 26.4% p.a. by a specialist vehicle finance company — the only lender to approve him after three declines. The total repayment over 5 years at that rate would be approximately $66,000 — $24,000 more than the purchase price.

His Equifax score was 431. His file showed two entries: a $290 default from an internet provider and a cluster of five hard enquiries from his recent loan applications.

During his ACS assessment, we found the internet provider had listed the default before the mandatory 30-day waiting period following the Section 21D notice had elapsed — a procedural breach of the Credit Reporting Code. We also identified that two of the five enquiries had been run by a finance broker without per-lender consent.

We challenged both. The default was removed on day 26. Two enquiries were removed the following week.

Marco's Equifax score moved from 431 to 652. He stopped all new applications during the process. A non-bank lender approved him at 13.2% p.a. — still not perfect, but the total repayment dropped from $66,000 to approximately $55,800.

Result: Score moved from 431 to 652 in 33 days. The rate improvement from 26.4% to 13.2% saved Marco approximately $10,200 on his $42,000 commercial vehicle loan over 5 years. He paid nothing until we succeeded. Subject to individual assessment; results may vary.

Steps If Your Score Falls Short of Car Loan Requirements

1. Pull your Equifax credit report free at equifax.com.au — know exactly where you stand before approaching any lender
2. Stop all new applications — every rejected application adds another hard enquiry, dropping your score further
3. Get a free credit assessment — find out within 24 hours whether any negative entries can be challenged under the Privacy Act 1988
4. If removal is viable, pursue it before applying — 30–90 days is often enough to unlock meaningfully better car loan rates
5. If removal isn't viable, work with a specialist vehicle finance broker — they have access to lenders not visible on comparison sites
6. Consider the total cost, not the monthly payment — a lower monthly figure over a longer term often costs far more overall

Frequently Asked Questions

What credit score do I need for a car loan in Australia? For the best mainstream car loan rates, aim for Equifax 661+ (Good band). Scores of 620–660 can still access non-bank lenders at reasonable rates. Below 600 limits you to specialist lenders at significantly higher rates. An active default on your file often triggers automatic declines regardless of score — making default removal the priority before applying.

Can I get a car loan with bad credit in Australia? Yes — specialist vehicle finance lenders will approve car loans for people with bad credit, including active defaults, but at rates of 20–30% p.a. versus 7–10% for good-credit borrowers. The cost difference on a typical car loan is often $10,000–$20,000 over the loan term. See our bad credit car loans guide for full detail.

Does a car loan help build credit in Australia? Yes — consistent on-time repayments on a car loan are reported under CCR and contribute positively to your repayment history score. A car loan you manage well over 12–24 months can meaningfully improve your credit profile. The key is that the repayments must be manageable — an overcommitted loan that leads to late payments makes things worse, not better.

Will applying for a car loan hurt my credit score? Each formal application creates a hard enquiry on your file, reducing your score by 5–30 points. If you're comparing rates, use pre-qualification tools that use soft enquiries, or provide one broker with consent to shop your application to multiple lenders simultaneously rather than applying individually at each lender.

How quickly can I improve my credit score for a car loan? If your score is being suppressed by an unlawfully listed default, professional removal typically takes 30–90 days and can produce improvements of 100–300 points. If no removal grounds exist, score improvement through positive repayment behaviour under CCR takes 3–12 months of consistent on-time payments.

Can I get a secured car loan with bad credit? Yes — a car loan secured against the vehicle is always considered secured from the lender's perspective, since they can repossess the car. What matters is whether additional security (a property or savings) is available, which can further reduce the rate available to you with some specialist lenders.

Find Out What's Holding Your Score Back

Before accepting a high-rate car loan, a free 24-hour assessment from ACS tells you whether anything on your file can be removed — and what that would do to your borrowing power.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has achieved a 98% success rate on accepted cases since 2014. No Win No Fee.

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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. General information only — not legal or financial advice. External resources: Equifax Australia | ASIC MoneySmart | AFCA

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