Financing your car purchase? Your credit score may be higher than you thought



You may not realize that when you take out a car loan, your FICO Auto Score is being used. This gives a little more weight to your auto and leasing history, as well as other installment loans.

Car dealer stocks remain scarce, but buyers are not intimidated as sales of both new and used cars hit record highs. Many buyers finance their purchase and this requires a credit check.

The standard FICO rating is between 300 and 850. But for a car loan, lenders use the FICO Auto Score instead. The automatic score ranges from 250 to 900.

“These are the same basics like paying bills on time, keeping debt low and the like. But for something like the FICO Auto Score, they’re going to give a little more weight to your story with auto loans and leases, and other installment loans, ”said Ted Rossman.

There is a FICO bank card rating that more seriously affects the behavior of credit cards. FICO is the main provider of consumer credit scoring, but there are half a dozen different versions of FICO scores that lenders use for different types of loans. While FICO is the most widely used, Bankrate claims there are dozens of other credit scoring providers.

To obtain a good credit history, consumers should strive to maintain their FICO rating at 670 or higher. The standard FICO rating is between 300 and 850, although most consumers have a credit rating of less than 800.

“Only about 20%, or roughly one in five Americans, is in a club of over 800 people. For the most part, by traditional estimates, anything above 740 is indeed considered fungible. It’s really just a bragging right, ”Rossman said.

The average monthly payment for a car loan is now at an all-time high of $ 563 for new cars, $ 379 for used cars and $ 450 for rented cars. according to LendingTree… Americans borrow about $ 56 billion a month in 2.3 million new car loans.

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