Can You Get a Mortgage or Car Loan With a 500-600 Credit Score?

Yes — But It'll Cost You More

You can get both a mortgage and a car loan with a score in the 500-600 range. But you'll pay significantly higher interest rates than someone with a 700+ score. On a 30-year mortgage, that rate difference can mean tens of thousands of dollars in extra interest over the life of the loan.

Here's the reality check by score range:

Mortgage Minimum Scores

FHA loans: Minimum 500 with 10% down payment. Minimum 580 with 3.5% down payment. FHA is the most accessible path for low-credit borrowers.

Conventional loans: Minimum 620 for most lenders. Some allow 580 with compensating factors (large down payment, low debt-to-income ratio, significant cash reserves).

VA loans: No official minimum from the VA, but most lenders require 580-620. The VA guaranty reduces lender risk, making them more flexible.

USDA loans: Minimum 640 for automated approval. Manual underwriting may accept lower scores.

Important: mortgage lenders typically use FICO scores 5, 2, and 4 — older models that may differ from what you see on Credit Karma or your bank app. The FICO vs VantageScore difference matters here.

Auto Loan Minimum Scores

There's no hard minimum for auto loans — it's entirely up to the lender. But here's the general landscape:

Prime lenders (banks, credit unions): Typically want 660+. Best rates go to 720+.

Subprime lenders: Will work with 500-600 scores. Expect rates of 10-20%+ APR.

Buy-here-pay-here dealers: No credit check but terrible terms — 20-30%+ APR, overpriced vehicles, and repo-friendly contracts.

A 600 score might get you a 12% auto loan. A 750 score gets you 5%. On a $30,000 car over 60 months, that's the difference between $6,700 and $2,900 in total interest. Spending 90 days improving your score before buying can save you thousands.

The Smart Play: Improve First, Then Apply

Unless you're in an emergency, investing 60-90 days in credit improvement before a major loan application is almost always worth it. Here's the priority order:

1. Pay down utilization. Fastest score impact — can gain 30-50 points in one billing cycle.

2. Dispute errors. A removed late payment can gain 20-40 points within 30 days.

3. Don't open new credit. Hard inquiries and new accounts lower your score. Freeze applications until after your loan closes.

4. Pay everything on time. One late payment during this window can tank your application.

Every 20-point score increase can mean a 0.25-0.5% rate reduction. On a $300,000 mortgage, 0.5% saves you $30,000+ over 30 years.