What credit score do you need to buy a car in South Africa?

Understanding your credit score requirements for vehicle finance and how to improve your approval chances.

• Many South African lenders look for credit scores of 600 or higher when considering car finance, though some may review applications from slightly lower scores depending on affordability.

• Higher credit scores (658+) can improve your chances of securing lower interest rates and better loan terms, depending on the lender and vehicle.

• Your credit score directly affects both your monthly repayment and the total cost of your car loan.

• If your score is lower, you may still have options, such as making a larger deposit, applying with a co-applicant, or improving your score first.

• Checking your credit score regularly helps you plan your car purchase with confidence.

• ClearScore gives you free access to your Experian credit score and personalised insights to help you improve your creditworthiness over time.

Important: This article provides general information only and does not constitute financial advice. Individual circumstances vary significantly, and you should seek independent financial advice before making any financial decisions. Credit applications may be declined, and terms may vary based on individual circumstances. Information is accurate at the time of writing and may change.

There’s no single credit score that guarantees car finance approval in South Africa. However, many lenders prefer applicants with credit scores of 600 or higher, while some may still consider lower scores depending on affordability and overall credit behaviour.

Your credit score plays a big role in both approval likelihood and interest rates. Scores in the excellent range (658+) typically unlock the best rates and terms, while lower scores may require alternative approaches such as a larger deposit or a co-applicant.

While rates vary, a representative APR for vehicle finance in South Africa is currently approximately 13.0% (calculated as the Prime Lending Rate of 10.25% plus a risk margin), though your personal rate will be tailored to your specific credit profile.

What is a credit score?

To understand what score you need to buy a car, you first need to understand what a credit score is. A credit score is a numerical representation of your creditworthiness. It's calculated using information from your credit history and takes the form of a credit report that shows your borrowing and payment habits. Your credit score is critical when you try to get different financial products and benefits – such as credit cards, loans, and home loans. The higher your score, the less risky you appear to lenders.

How credit scores are calculated

Your credit score depends on several factors, including your payment history, the amount of debt you currently have, the length of your credit history, the types of credit accounts you hold, and recent credit applications. Payment history carries the most weight.

Your credit score is calculated by a credit bureau. There are four main credit bureaus in South Africa: Experian, TransUnion, Compuscan and XDS. At ClearScore, we show you your Experian credit score, which ranges from 0 to 740. Each credit bureau receives information from lenders about your credit history and how you manage it. Other information, such as court judgments against you or whether you are undergoing debt review, is also sent to the credit bureaus and forms part of your credit report.

While many factors determine your creditworthiness, most car dealers have a minimum credit score requirement before they consider giving you a loan.

While the minimum score can change depending on the dealership and the make and model of the car you are interested in, a score of at least 600 is usually needed to get a car loan. However, it's worth remembering that a low credit score doesn't automatically rule you out, and there are options available if you have a lower score.

Credit score ranges:

Each credit score range comes with different advantages and challenges when applying for car finance.

Excellent credit scores

Scores above 658 put you in the excellent category. With this score, you'll qualify for the best available interest rates, have multiple lender options, and enjoy a straightforward approval process. You may also have access to promotional rates or special financing offers.

Good credit scores

According to Experian's scoring system, a good credit score for buying a car in South Africa should be between 634 and 657 to qualify as a minimum-risk candidate. This range typically qualifies you for competitive interest rates and favourable loan terms, with no additional requirements.

Below-average and poor credit scores

Scores below 616 are considered poor or below average by Experian. While a lower credit score won't necessarily prevent you from securing a car loan, it will likely lead to costlier monthly instalments due to higher interest rates. You may need to explore alternative financing options or improve your score first.

Your credit score is important, but it's not the only factor lenders evaluate when reviewing your car finance application.

Payment history and repayment behaviour

Lenders look at your track record of making on-time payments. Even if your credit score is on the lower side, a recent history of consistent payments can work in your favour.

Employment stability and income

Steady employment and sufficient income are crucial. Lenders want to see that you have a reliable source of income to support the monthly car payment alongside your other financial obligations.

Debt-to-income ratio

Your debt-to-income ratio compares your monthly debt payments to your gross monthly income. Most lenders prefer this ratio to be below 40%, meaning your total monthly debt payments shouldn't exceed 40% of your income.

Credit utilisation and outstanding debt

How much of your available credit you're currently using affects your approval chances. High credit card balances or maxed-out accounts can signal financial stress, even if you're making minimum payments on time.

If your credit score needs work, there are proven strategies to strengthen your profile before applying for car finance.

Pay bills on time

Payment history is the most significant factor in your credit score. Set up automatic payments or reminders to ensure you never miss due dates on credit cards, loans, or other accounts.

Reduce outstanding debt

Paying down existing debt, especially credit card balances, can help improve your score. Focus on accounts with high balances relative to their credit limits first.

Limit new credit applications

Each credit application creates a hard inquiry on your report, which can temporarily lower your score. Avoid applying for new credit cards or loans in the months leading up to your car purchase.

Build up the length of your credit history

Keep older accounts open, even if you don't use them regularly. The length of your credit history contributes to your overall score, and closing old accounts can shorten your average account age.

Being strategic about your application process can help minimise the impact on your credit score while maximising your chances of approval.

Pre-approval and credit inquiries Getting pre-approved gives you a clear budget and strengthens your negotiating position. Some lenders offer pre-approval with only a soft credit inquiry, which doesn't affect your credit score.

Timing multiple applications strategically If you need to apply with multiple lenders, do so within a 14-30 day window. Credit scoring models typically count multiple auto loan inquiries within this timeframe as a single inquiry for scoring purposes.

Choosing the right lender Different lenders have different criteria and specialisations. Banks typically offer the best rates for borrowers with good credit, while specialised auto lenders may be more flexible with credit challenges.

Avoiding these pitfalls can save you money and protect your credit score during the car-buying process.

Applying to multiple lenders simultaneously outside the rate shopping window

Submitting applications weeks apart can result in multiple hard inquiries, which can lower your credit score. Concentrate your applications within a short timeframe to minimise the impact.

Making large purchases before approval

Avoid making significant purchases or taking on new debt between your application and approval. Lenders may re-check your credit before finalising the loan, and new debt could jeopardise your approval.

Ignoring credit report errors

Incorrect information on your credit report can unfairly lower your score. Review your report carefully and dispute any errors before applying for financing.

Can I get car finance with a lower credit score? Yes, you can still get car finance with a "bad" credit score, though you’re more likely to face higher interest rates and may need a co-signer or larger down payment. Specialised lenders work with borrowers who have credit challenges.

How long does it take to improve my credit score? Credit score improvements can happen relatively quickly for some changes, like paying down credit card balances, but building a strong credit history takes time. Consistent positive behaviour over 6-12 months typically shows meaningful improvement.

Will checking my credit score hurt my rating? No, checking your own credit score is considered a soft inquiry and doesn't affect your credit rating. You can monitor your score as often as you like without any negative impact.

What should I do if I'm denied car finance? If you're denied, ask the lender for the specific reasons. You can then work on addressing those issues, such as paying down debt or adding a co-signer, before reapplying with the same or a different lender.

How can ClearScore help me with car finance? ClearScore provides free access to your credit score and report, helping you understand your current position and track improvements over time. You can also get personalised tips for improving your creditworthiness before applying for car finance.

What's the difference between a hard and soft credit inquiry? A soft inquiry doesn't affect your credit score and occurs when you check your own score or when lenders pre-qualify you for offers. A hard inquiry happens when you formally apply for credit and can temporarily lower your score by a few points.

Should I get financing through the dealer or my bank? Compare offers from both sources. Banks often offer better rates to borrowers with good credit, while dealers may offer more flexibility to borrowers with credit challenges. Get quotes from both to ensure you're getting the best deal.

How much should I put down on a car loan? While some lenders require as little as 10% down, putting down 20% or more can significantly improve your loan terms and reduce your monthly payments. A larger down payment also helps protect you from owing more than the car is worth.

Ready to check your credit score and improve your car finance options? Visit ClearScore to get your free credit score and personalised insights to help you secure better car financing terms.