Car dealers can use "different" FICO scores than the ones you see
by Stephen Snyder
The car dealer is probably using what is known as the FICO Auto Industry Option score instead of a traditional FICO credit score.
You see, car dealers not only get to select the credit reporting agency they receive FICO credit scores from...they also get to decide if they will use a traditional FICO credit score or a variation of a FICO score called an Auto Industry Option score.
What's the difference between these two types of scores?Not a whole lot to most people......but there's enough variation to make the majority of auto lenders use the Auto Industry Option score. The real difference between the two scores is that the Auto Industry Option score pays a lot more attention to how you handled previous auto credit.
Have you made late payments on a current or previous auto loan or lease?
Have you ever settled an auto loan or lease for less than you owed? Have you had a car repossessed?
Have you had an auto account sent to collections? Did you include your car loan or lease in your bankruptcy?
Those actions will affect your Auto Industry Option score more than they'll affect your traditional FICO score.Bottom line—if you handled your previous auto credit perfectly, you should have a high FICO Auto Industry Option score—that's a good thing.
But what if you've had a few bumps in the auto credit road in the past? You guessed it...your Auto Industry Option score will be lower.You'll be perceived as a greater credit risk and the auto lender may either deny you or use your lower score to justify charging you a higher interest rate.
You see, auto lenders are different than other types of lenders. And I'm not talking about their slimy ways, leisure suits, short ties, manly hairy chests, or gold bling. A lot of other lenders look at your whole credit picture to determine whether or not to give you a loan.
But many auto lenders care about only one thing...how you handled your past AUTO credit.
That's what a FICO Auto Industry Option Score gives car dealers—a way to pinpoint how you've handled what matters to them the most. So, even if everything else on your credit reports went down the toilet after your bankruptcy, if you didn't include your auto loan in your bankruptcy and never defaulted or missed a car payment, your Auto Industry scores will probably be better than your traditional FICO scores!
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