What credit score do car dealers use?

If you are a savvy auto loan buyer, you know to check your credit score before heading to a dealer. Knowing your credit score gives you a better idea of ​​whether you will get a car loan approval and the rate you are likely to qualify for. There is only one thing that could go wrong with that strategy. Your car dealer may be using a different credit score to approve your car loan, one that you do not have access to.

Why your result is different from Auto Lender

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A credit score that you access through a provider such as CreditKarma.com or even myFICO.com is a generic educational credit score, which would give you an idea of ​​where your credit score is. When applying for a car loan, the lender will usually use a credit score that is adjusted to predict the likelihood that you will default to your car loan. For example, FICO offers a FICO Auto Score that is specific to auto loans and not sold directly to consumers. The FICO Auto Score uses a range of 250 to 900, which means that the credit score of a car loan can be much higher or lower than the score you are checking.

The information in your credit report changes frequently, which means that your credit score can vary from one day to the next. If there are days between the time you review your score and the lender checks your score, your credit score could be very different depending on how your credit report has changed.

Although the result may be different, it is still based on the basic data in your credit report. If your credit history is good, your credit score will reflect on that, no matter what credit model the lender uses to approve your loan application.

Other credit ratings for industry

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The automatic result is not the only industry result that FICO sells to businesses.

The company also sells a mortgage score, medication adherence score, insurance risk score, bankruptcy score, and even as a result that tells you how much revenue your account will generate. Lenders can use any of these results to help decide whether to approve your loan application.

Do you still check your credit?

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It’s still a good idea to check your credit score before applying for a car loan, even though you know that it won’t exactly match the result the lender will see. Checking your loan gives you a general idea of ​​whether you have good or bad credit. If you have a low credit score, you might consider improving your credit before purchasing a car. This will give you a better chance of getting approval for a car loan with better conditions.

It may be a good idea to check your credit report in addition to your credit score, especially if your credit score is lower than what you expected. You can check that the information in your credit report is correct and dispute the errors you find. Doing this before embarking on a car purchase will help you get the best possible loan before applying for a car loan. Work on making sure the information in your credit report is positive, so no matter what credit your car lender uses, it will show that you have excellent credit.

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