It’s common knowledge that getting financed for a car depends largely on your credit score — usually your FICO score, which is used by the vast majority of lenders.
What many people don’t realize, though, is that there’s a special FICO score specific to auto lending. So before applying for a loan, find out your FICO auto score and make sure you understand how it could impact your ability to get a loan.
How your FICO auto score differs from your base FICO score
Industry-specific FICO scores — like the auto score — start with a base FICO score.
Think of a base FICO score as a universal score of sorts, one that assigns you a level of creditworthiness for any type of credit. The FICO auto score, on the other hand, assigns you a level of creditworthiness for auto loans specifically.
There’s also a different scoring range: Your base FICO score will fall between 300 and 850, but the auto score ranges from 250 to 900. There are several versions of the FICO auto credit score, but the most recent one was introduced in June 2016.
FICO Auto Score 9 XT
This newest version of FICO’s car credit score is based on trended data pulled from TransUnion CreditVision Data spanning up to 30 months of a consumer’s credit behavior.
“We’ve worked with TransUnion on a score that examines the way a consumer’s behavior is evolving,” says Jim Wehmann, executive vice president, Scores, at FICO.
“This helps creditworthy consumers qualify for the best credit terms available to them, and helps auto lenders expand their portfolios safely by making more precise decisions about loan terms.”
The FICO Auto Score 9 XT takes into account whether:
- Your credit card balances have been increasing or decreasing
- You’ve been making more than just the minimum payments on revolving accounts
- Your credit utilization ratio has been increasing or decreasing
Though it will take time for lenders to adopt the new FICO Auto Score 9 XT, it is encouraging to the see the direction it takes in limiting the damage of certain types of negative credit report listings.
For instance, if you pay off an account that’s been in collections, it won’t count against your FICO Auto Score 9 XT. And if you have unpaid medical bills in collections, it won’t count as much against you as unpaid non-medical bills in collections.
How to make this work for you
More than anything, FICO’s new car credit score punctuates the importance of following some good credit practices:
- Pay down your credit cards. It’s never a good idea to carry a balance from month to month. If it’s too late for that, make a plan for returning your balances to zero as soon as possible.
- Or pay more than the required minimum payments. This signals to creditors that you are less likely to get in over your head. Plus, it will save you a ton in interest fees.
- Keep your credit utilization ratio under 30 percent. For example, if you have a total of $10,000 in credit card limits, you never want to use more than $3,000 at a time.
- Pay off debts in collections. If you’re able to settle for less than you owe, be sure to get that in writing before paying them a dime. (Get tips on how to handle debt collectors here.)
View your FICO score for car loan applications
When you purchase your FICO scores and credit reports through their website, you’ll receive some industry-specific FICO scores as well. Your FICO auto credit score will be among them.
You can expect to see:
- Your 3-digit car credit score (including which version you’re seeing)
- The name of the credit bureau whose information generated the score
- The date the score was generated
- The score range
- A list of factors that are having the greatest negative impact on your score (though if your score is high enough, you will see no such list)
- An explanation of how lenders use the score
All of that said, keep in mind that the FICO auto score you see may not be the one that auto lenders are using to consider you for a loan. They can use an older version, or they might not use a FICO auto score — or any FICO score — at all.
Plus, there are all sorts of other things auto lenders look at when considering you for financing, like income and the amount of your down payment.
As helpful as it may be to know your FICO auto score, what’s more important is practicing the good credit habits that help all of your credit scores.
Beyond that, take the time to save up as much as you can for your down payment. The less you have to finance, the better your chances for getting a loan and the less you’ll end up paying for it in the long run.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|