Most car dealers use the FICO Score 8 scale to determine their eligibility for a loan. The FICO score is the most commonly used because it is considered to be the most accurate assessment of your creditworthiness. The scores from all three major credit bureaus are needed to create a FICO score. TransUnion offers CreditVision, which is designed for auto lenders, financial companies and dealers.
The score ranges from 300 to 850 and helps predict the likelihood of a 60-day default within the first 24 months of a new car loan. Auto lenders use it to assess your creditworthiness, which is your ability to successfully repay borrowed money on time. Most traditional car lenders, such as banks and credit unions, often require a higher credit score to qualify. If you're a smart buyer of car loans, you know that you should check your credit score before going to the dealership.
If your credit history is good, your credit score will reflect that, regardless of the credit rating model the lender uses to approve your loan application. The combination of credits refers to whether you have installment loans (with equal payments over a given period) and revolving credit (variable payments with no established end date, as is the case with credit cards). Your FICO score for cars is a special rating ranging from 250 to 900 and that takes into account previous car loan payments more than the traditional FICO score. These actions could improve all your credit scores, making it easier to approve an auto loan at a favorable rate.
The FICO credit rating model is the credit rating model most used by lenders and car dealers, and it is also the oldest and the first credit rating model in history. Doing research before you go car shopping can help you optimize your credit score before you apply for an auto loan and improve your general understanding of the complex variables of the loan approval process. Your credit score is a 3-digit number that lenders use to estimate how likely you are to repay debt, such as a car loan or mortgage. The FICO Auto Score 9 is the most recent version and the one currently used by all credit bureaus.
Special financial dealers check your credit score, but they are contracted with high-risk lenders who can help you in many unique credit circumstances. If you know your FICO credit score and it's below 670, you may need to find a special financial dealer to be more likely to qualify for an auto loan. Auto lenders use scores that analyze past repayment habits and predict what these patterns could mean for their auto loan payments. If you're diligent about building and maintaining your credit, your report will show that you have an excellent reputation, regardless of the rating model an auto lender chooses.