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What credit score is used to buy a car

What credit score is used to buy a car

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The pandemic has had a huge impact on consumers’ finances and spending habits. It helped a lot saving more money since WWII and convinced others to avoid public transit at all costs. These two phenomena cause a record number of Americans to get their hands on a new set of wheels.

Finding financing is often the first step in most major purchases, including buying a new (or used) car. As car loans become more affordable To offset the high cost of cars right now, your loan terms and rates will vary depending on your credit score. Fortunately, you can check your credit score before applying to see what type of loan you might qualify for.

VantageScore® and FICO® Score are the two main scoring models that provide credit scores. Both rate consumers on a scale of 300 to 850, and auto lenders can use either to approve you for a new car loan or lease. Knowing the widely used FICO scores 8 and 9, and VantageScore 3.0 and 4.0, won’t hurt, but there’s a credit score designed just for auto lenders that’s worth considering when looking to finance a car. .

What credit score is used when buying a car

Different auto lenders check different credit scores, so you won’t know for sure which one they’ll be looking at when determining your auto loan application. Your best bet, however, would be to check something called an industry-specific score.

FICO provides industry-specific scores that consumers can refer to when making certain purchases like a car or a home. (Check complete list of FICO score versions for different financial products.) Much like a standard credit score, your industry-specific score helps determine future loan terms and interest rates.

The FICO Auto Score takes into account your typical credit behaviors, but puts more emphasis on how you’ve handled auto loan payments in the past. It takes into account things like: have you always made your loan repayments and on time? FICO Auto Scores range from 250 to 900 and have several versions, including FICO Auto Scores 2, 4, 5 and 8. The easiest way to check all four FICO Auto Scores at the same time is to use the monitoring service credit from FICO.

Knowing your auto-related credit score can be helpful when financing a car, as it can affect your loan terms and rates. Any increase in your interest rate can mean a higher monthly payment and thousands of dollars more over the course of a loan.

How to Check All Versions of Your FICO Auto Score

If you want to finance a car with an auto loan, subscribe to one of the FICO® Basic, Advanced, or Premier Credit Monitoring Services can help.

The three FICO Basic, Advanced, and Premier plans provide access to 28 versions of your credit score so you can use it when applying for any type of credit, including car loans, mortgages, and credit cards . These three services will also alert you to potential fraud, such as someone opening a new loan in your name or a large increase in your credit card balance.

If all you want is multiple versions of your FICO score, sign up for Basic, the lowest tier, to save more money each month. Learn more about the differences between each FICO credit monitoring service.

FICO® Basic, Advanced and Premier

  • Cost

    $19.95 to $39.95 per month

  • Credit bureaus monitored

    Experian for the Basic plan or Experian, Equifax and TransUnion for the Advanced and Premier plans

  • Credit score model used

  • Dark web analysis

    Yes, for Advanced and Premier plans

  • Identity insurance

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.