Understanding your FICO Auto Score

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FICO scores are the primary source for most auto loan companies. In fact, a unique type of FICO auto score has been specially designed for auto loans. Finding your FICO auto score is pretty easy, and you can do it for free.

We’ll explain the most important things you need to know about FICO scores, including how to find your score and how to increase your score.

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What is FICO Auto Score?

The basic FICO score measures how reliable you are at paying down debt. A car loan FICO score specifically measures your ability to repay a car loan.

Basic FICO scores and FICO car loans use different credit scoring models. Basic FICO scores range from 300 to 850, but automatic FICO scores range from 250 to 900.

The lender-viewed FICO auto score is measured using XT version 9 auto score measurement. This version is designed to account for credit behavior over the last 30 months using data from TransUnion’s CreditVision system.

Five main factors contribute to this version of the FICO automatic score:

  • Payment history
  • Credit utilization rate
  • Long credit history
  • Credit mix
  • New credit

Plus, an automatic FICO score prevents certain factors from significantly hurting your credit score.

For example, unpaid medical bills do not incur as many penalties as other unpaid bills. Plus, paying off accounts that are in collections no longer count towards your credit score.

How Do I Check My FICO Auto Score?

It’s always a good idea to check your FICO auto score before you take out a car loan. This will give you an idea of ​​what you can expect in terms of loan terms and interest rates. Checking your FICO auto score is easy, and you can do it straight from FICO.

A one-time report from one credit bureau, whether it’s Experian, TransUnion, or Equifax, costs about $20, although you can get reports from all three for $60. Since your credit score can vary slightly depending on the bureau, it is best to get your credit score from several credit bureaus to get a clear picture of your overall score.

For example, imagine that you have a credit score of about 665. TransUnion reports your score as 667, while Equifax reports it as 660. A TransUnion report will place you in the prime category, while the Equifax report will place you in the nonprime category. Most lenders do not disclose which agency they use to run credit reports.

Keep in mind that any reports you get from FICO will only be valid for 30 days. These reports serve as a real-time snapshot of your credit, which is constantly changing based on your financial activity.

If you’re interested in keeping track of your credit, FICO offers a subscription that lets you stay up to date with credit changes. All FICO subscription plans include credit monitoring.

You can also get insight into how lenders view you, as well as a detailed analysis of your credit score, complete with credit history and payment charts. This subscription may also include features such as identity theft insurance and identity restoration services.

What is a Good FICO Score?

In general, a good credit score is a score of 670 or more. If you have good credit, you have the best chance of getting favorable loan terms. To get the lowest interest rates and the best loan terms, you’ll want to get a credit score in the very good category (720 to 850).

If you don’t have a good credit score, some lenders may not work with you. While there are lenders who specialize in issuing loans to people with deep subprime or even subprime credit, the interest rates on these loans are usually very high. For example, deep subprime borrowers may earn interest rates as high as 20 percent when they get a loan.

Can I Check My FICO Score For Free?

There are several ways to check your credit score for free. Many banks, credit unions, and credit card issuers will offer free credit reports. Experian, for example, gives you a free FICO score as part of its credit report service. AnnualCreditReport.com it also lets you get a free report from the three major credit bureaus once a year.

How to Increase Your FICO Auto Score

Before you start applying for a car loan, it’s best to get your automatic FICO score as high as possible. Fortunately, there are several ways to increase your score:

Pay off your Credit Card

One of the quickest ways to increase your credit score is to pay off your credit card balance. This can be a challenge if you’re on a tight budget, but not carrying a credit card balance from one month to the next can do wonders for your overall credit score. Getting your balance to zero as soon as possible can help you build up your credit before getting a loan.

Pay More Than The Minimum

In order to maintain your credit score, you are required to make a minimum payment on your credit card balance. But if you can afford to pay more than the minimum amount, you can increase your credit score. Paying more than the minimum amount shows the lender that you can comfortably pay off your credit card debt. You’ll also pay less in interest if you pay it off sooner.

Pay Collection

Debt collectors can be tough to deal with, but paying off your collection is essential to improving your credit score. Having debt in collections will almost certainly cause your credit score to plummet, which can make it more difficult to qualify for favorable auto loan terms.

Keep Your Credit Utilization Low

Every credit card has a limit. If you get close to that limit, your credit score may drop. Keeping your credit usage low is a great way to improve your credit score before you get a car loan. In general, using 30 percent or less of your credit allocation shows lenders that you are a reliable borrower.

Headshot of Elizabeth Rivelli

Finance & Insurance Editor

Elizabeth Rivelli is a freelance writer with over three years experience in finance and personal insurance. He has extensive knowledge of various lines of insurance, including auto insurance and property insurance. His byline has appeared in dozens of online financial publications, such as The Balance, Investopedia, Reviews.com, Forbes and Bankrate.

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