What Credit Scores Do Dealerships Use For Auto Loans

credit specialist for the 80 20 podcast excited to go into some new information with you guys today as we go ahead and answer one of the questions that we commonly see on our website page and that is what credit score is used to buy a car let's go into it

What Credit Scores Do Dealerships Use for Auto Loans?

Dealerships typically use FICO auto scores from multiple credit bureaus to evaluate loan eligibility.

so the first thing you got to know is that when you are buying a car it really depends on where you're going to buy the car first okay if you're going to a dealership assuming that you're going to do that they're going to actually send your credit report and they're going to pull the actual FICO scores that are used for the auto uh to make the auto loan process where they can actually see the scores the history and things of that sort okay

so to see your auto loan scores you have to go to check online, okay and when you see your auto loan score category then you'll be able to see all three of your credit scores okay you're gonna have a score from TransUnion Equifax and Experian

now some dealership just look at all three some look at two some look at one and then every dealership is going to be different just depending on what type of risk factor they like to see if they are privately owned or if they are nationally owned or let's say for example they're probably owned but they're representing a national brand like Nissan Ford or something like that then they're usually going to have some type of regulations as to what credit scores they can use okay but if it's a small mom and pop kind of place like Bob's Used Cars or something like that then he's going to be able to choose which bureaus he wants to see okay

How to Check Your Auto Loan Credit Score Before Buying a Car

Knowing your credit score in advance helps you negotiate better auto loan terms.

and to be honest with you the dealerships their main goal is to see uh how much money they can actually you know profit from on the deal just like anything else right and so there's nothing wrong with that with that being said you need to know what your scores are before you go to the dealership okay

so again you go to myfico.com they have a monthly plan that's like 29.99 you don't have to keep the monthly plan if you don't want to you can easily just purchase each Bureau separately but that's is going to cost you about 20 dollars per Bureau which comes out to sixty dollars versus thirty dollars and then you know canceling it a month later okay

and not only are you gonna be able to see your auto loan cycle scores but you'll be able to see all of your other category 54 scores which includes your mortgage scores your credit uh your credit card scores your personal loan scores and all the other score categories that are out there okay just in case anyone's interested in knowing there's about nine different uh you know categories of credit scores okay and so when you do the math that comes out to about nine times three and it's actually a few more other brand new scores that are actually coming out as well

but for now many dealerships are going to be using the auto loan uh score uh they usually use some are going to use the FICO score four and some may actually be using the FICO score eight okay

FICO Score 4 vs FICO Score 8: What Auto Lenders Really Use

Different dealerships may rely on different FICO models when evaluating your loan application.

and there are some dealerships that will actually allow you to do what they call a soft pool which means that you don't have to worry about getting a hard inquiry um it's going to be a soft pull a soft increase which does not I repeat does not not affect your credit score anytime you are giving your social your full social to someone they're more than likely going to run your credit so if you don't want them to run your credit don't give them your social and they won't be able to do so

but if you want to know what your scores are prior to let's go to myfico.com get the advanced plan and you'll be able to see your auto loan scores what I always recommend is before you stop by the dealership you can always just kind of shop around and see which way you want to actually go about doing it that way when you're calling the dealerships you're able to say Hey you know how do you guys uh determine you know the approval for your auto loan oh we look at two out of three scores we look at one out of three scores which bureaus do you guys use do you guys go with the highest and lowest do you guys do averages do you guys look at the middle school how do you do it

How Dealerships Evaluate Your Credit for Car Loans

Each dealership uses its own method to assess creditworthiness and loan approval.

every dealership is going to have a different way that they do this a lot of people think that dealerships are doing things the same exact way they are not doing things the same as that great because there are no federal regulations or upon which they need to use versus with mortgages there are federal regulations okay

so hopefully this article is helpful let's see if you guys got any questions I don't see any questions there so if you guys are on YouTube make sure you guys go ahead and like this article if you like it like it if you want to share it share it and as always be sure to subscribe as we got a lot more content well on the way and I'll go ahead and then put this information on the other platforms as well too

and again guys also if you're looking to improve your credit score the right way and you know start improving your credit score qualify for that new car qualify to lease a car even if you're looking to go into homeownership are currently lowering your car payment or getting a higher limit credit card we most definitely can help you with our Advanced Credit blueprint you can go ahead and grab that that's actually a 40 off today so you can most definitely take advantage, okay guys

Soft Pull vs Hard Inquiry: Protect Your Credit When Shopping for a Car

Understanding credit checks helps you avoid unnecessary damage to your credit score.

so make sure you guys go ahead and grab that if you're looking to accomplish uh your credit goes a little bit sooner rather than later I'll catch you guys on the next article have a good one