Don’t Buy a Car Before You Understand the FICO Auto Score

fico auto score

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.

The takeaway

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.

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