Buying a car while having bad credit

Navigating a car purchase with a credit score under 600 can feel daunting. Many dealerships want to see at least “fair credit” (620 or higher) to finance a car to begin with. And even if you do qualify, your credit health could cost – or save – you thousands of dollars in interest fees. And yet, your dream car can still be in reach with the right strategies and tools. This article explores how individuals with less-than-perfect credit scores can still drive off the lot in the car of their dreams.

Meet Marquita

“Everybody reaches a brick wall where it’s like, “Oh my God, what am I going to do?”

This is Marquita – a social worker from Oakland – describing the hopelessness she felt as she tried to find a car with a 525 credit score. Marquita’s worked as a motivational speaker and a homeless counselor for women and children in the Bay area. But after losing her car during the pandemic, even someone as inspiring as her felt the sense of overwhelm and despair that can come with trying to get back on one’s feet with low credit.

Though so much of Marquita’s life had been devoted to opening doors for others – with bad credit, her bad credit made her feel like she was stuck on the other side.

”A whole bunch of closed doors, A whole bunch of, “No,” and it was the worst degrading feeling. I just knew I was not in any way, shape going to be getting another car off the lot for another seven years.”

How Marquita Did It

This is Marquita, just over one year later, in her dream car: an Infiniti Q50.

”My credit improved 156 points within the first year. It’s unbelievable, but it’s real.”

So how did she do it? Marquita’s success could be boiled down to three factors: hope, persistence, and credit-building with Kikoff.

”If I was to encourage someone, I would just tell them – keep on keeping on until your answer comes, and it will come. Just knowing what to do is key.”

When she found herself in this place, her answer was Kikoff.

“Kikoff was amazing. I have a brand new car. I am looking forward to purchasing my first home for 2025.”

By combining her grit with Kikoff’s credit building power, Marquita says she was able to “get [her] life back” – a sentiment that many who are denied because of their credit can understand. 

What is Kikoff? How does it help credit?

Kikoff is the #1 way to build credit safely, quickly, and easily. Designed to be affordable and accessible, Kikoff can help you improve your credit – starting at just $5 a month.

”My favorite thing was $5 to join. I just was like, “What?“

Kikoff works by improving the key credit factors that influence your score. For example: with Kikoff Basic, your $5 payment is reported to all three credit bureaus. In their eyes, you’re making on-time payments, keeping your credit utilization low, and building a good credit history.

So whether your lender uses your FICO score or your VantageScore – or use credit reports from bureaus like Equifax, Experian, or TransUnion – these effects can snowball into powerful positive effects before you know it.

If that wasn’t enough, Kikoff also has features like:

• Rent reporting – so you can build credit with the monthly rent you already pay.
• Disputes – so you can find and address errors on your credit report in minutes.

Secured Credit Card – you can build credit with everyday purchases, without the risks of a lot of credit cards

And the best part? You don’t need to be an expert to reach healthier credit with Kikoff. With autopay, all of these improvements can go to work for you in the background. Made specifically with people who are new to credit or confused by credit – there’s no credit check, and it’s never been easier to get started than it is with Kikoff.

Putting in the Work

While Marquita chalks up her successful recovery to Kikoff, it’s important to remember how important mindset and consistency were to her journey as well.

“I worked at building my credit back up for over a year. I mean, I budgeted, I was not at fancy restaurants anymore, I did not go out. They were like, ‘Come on, let’s go out.’ I’m like, ‘No.’ I had a one track focus goal and that was to purchase me another vehicle, and so here I am. And now? Hey, the house is next.”

While Kikoff is often an enormous help with the heavy lifting of credit building, it’s important to remember that the future of your credit health is always in your hands.

“I became more knowledgeable on how to just get my life back together again. My overwhelming that I had began to lessen. I began to feel like, ‘Okay, I’m on the right track.'”

It’s clear Marquita took matters into her own hands. Even though Kikoff played a major role in her success, she stayed on track with her bills, lived within her means, and avoided taking on unnecessary debt while she got back on her feet. These initiatives, paired with the factors that Kikoff helps with – like keeping low utilization, and establishing a record of on-time payments – helped accelerate the financial behavior she was practicing outside of her Kikoff account too.

Comparing Auto Loan Offers

Whether you’re car financing through dealerships, a bank, or a credit union – good credit can unlock not only approval, but can lower your monthly payment, and save you thousands.

With a lower credit score, you typically have to pay more to finance a car. The price of the car itself doesn’t usually change –  but the amount of your monthly payment, or the length of your loan can really add up over the long term.

Here’s an example: say you wanted to buy a 2024 Chevrolet Silverado, for about $37,000 – basically the price of an average new car. If your credit was subprime (a score of 501-600) the cost to finance that car would be about 12.28% of the outstanding balance. This might feel abstract, but with a sizable $10,000 down payment – that means you’re hypothetically paying almost 13% on your remaining balance every year.
With slightly better credit (a score of 601-660), your interest rate drops to 9.6%. This may not sound like much, but over a five-year car loan, the difference in cost to you amounts to $2,263. That’s right – better credit can put $2,263 back into your pocket if you’re making a car purchase soon.

The Road Ahead

Buying a car with bad credit is more accessible when you understand the financing landscape and use tools like Kikoff to improve your financial standing. With determination and the right approach, you can turn your car-buying dreams into reality, even with bad or fair credit.

This guide provides a clear pathway for individuals with less-than-perfect credit scores looking to buy or lease a car. By focusing on credit improvement and understanding financing options, purchasing your dream car becomes not just a possibility, but a probable success.