Finance a car purchase? Your credit score may seem higher than you think
You might not realize that when you go for a car loan, your FICO Auto Score is being used. This lends a little more weight to your history with auto loans and rentals, as well as other installment loans.
Car dealer inventories remain tight, but buyers are not discouraged, with new and used vehicle sales reaching record levels. Many buyers finance their purchase, which requires a credit check.
The standard FICO score ranges from 300 to 850. But for auto loans, lenders use the FICO Auto score instead. The automatic score goes from 250 to 900.
“It’s the same fundamentals like paying your bills on time and keeping your debt low and that sort of thing. But for something like the FICO Auto Score, they’re going to put a little more weight on your story with auto loans and rentals, as well as other installment loans, ”Ted Rossman told Credit Cards.com.
There is a FICO bank card score that weighs more heavily on credit card behavior. FICO is the leading 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 says there are dozens of other credit rating providers.
For good credit, consumers should strive to maintain their FICO score at 670 or higher. The standard FICO score ranges from 300 to 850, although most consumers don’t have a credit score above 800.
“Only about 20% or about one in five Americans is a member of this club of over 800 people. For the most part, however, on the traditional score, anything above 740 is really considered fundamentally interchangeable. It’s really just about bragging rights above that, ”Rossman said.
The average monthly auto loan payment is now a record high of $ 563 for new vehicles, $ 379 for used vehicles and $ 450 for leased vehicles. according to LendingTree. Americans take about $ 56 billion out of 2.3 million new auto loans each month.
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