Auto Loan Credit Score

Auto Loan Credit Score | Car Loan Credit ScoreMost people don’t realize there is a difference between their normal/classic FICO Score, and the score they’re graded on when they apply for car loan.

The Auto Loan Credit Score was developed by Fair Isaac (the same company that developed the classic FICO credit score) for the auto industry, to help it better predict the risks involved in lending you money for a car.

Also referred to as ‘FICO Auto Industry Option Score’, ‘Beacon 09’ or ‘FICO Auto-Enhanced Score’, it is used by auto dealers and other finance institutions that deal with car loans.

FICO Auto-Enhanced Score vs. Classic FICO
It is a well-known fact that consumers often pay loan obligations differently. For this reason, the Auto Industry Option Score puts more emphasis on previous auto loan information included in your credit report. This includes:

  • Late auto loan payments
  • Auto repossessions
  • Settled car loans or lease contracts for a smaller amount
  • Car loans sent to collection

This kind of derogatory information will affect your Auto-Enhanced Fico score more than it would your classic FICO score. On the other hand, other, non auto loan related derogatory information (e.g. late credit card payments, liens, collections etc.) will have lesser negative effect on your Auto-Enhanced Fico Score.

So basically, if you handled prior car loans good – you will most likely have a good FICO Auto Industry Option Score, and can expect to get favorable terms. If, however, you didn’t handle your prior car loans good or simply didn’t had an auto loan yet – your FICO Auto Industry Option Score will be low. You will be processed as a credit risk, and will be charged high interest rates or get declined altogether.

How can I find what is my FICO Auto-Enhanced Score?
Unfortunately, the Auto Loan Credit Score it not available for you to purchase and only dealers\finance companies are able to pull it.

Do all car dealers use FICO Auto Industry Option Score?
No. Some use Classic Fico. Others use FICO Auto Industry Option Score. And there are those that use both.

Most auto dealers not only get to choose the credit bureau they receive your credit information from, but they also get to decide what score to use – either Classic FICO or the Auto-Enhanced Option Score.

So how do they decide what score to use?
When a car dealer pulls both your Classic FICO score AND your Auto-enhanced FICO score from all three major credit bureaus, that means they’ll have six scores on you. It’s a guarantee that some of those scores are going to be higher than the others. It’s called “Spread”.

So which ones will they use when trying to get you financed? The one that’s good for them. The one that’s bad for you!

Car dealers and finance companies make money when they finance you. If they can quote you a higher interest rate than you deserve – they stand to make a large commission from the bank that finances you. It’s called “Playing the spread”.

The only way to make a killer “spread” is to make you think that you have lower scores.

How can you beat them at their own game?
Armed with that knowledge, you can use the spread to your advantage when you buy a car. Here’s what you need to do:

  1. Get your three Classic FICO scores from myFico (actually, nowadays you can only buy two – Equifax & TransUnion. Experian is no longer available).

    DO NOT get them from the credit bureaus themselves, because they only sell Vantage Scores to consumers, while you want your FICO scores.


    As of April 2015, sell consumers their more then 19 versions of their FICO scores.

    Until now, the only score consumers could buy was a generic version of FICO, which was different from what car dealers see. Starting this year – consumers can get the exact same score car dealers, mortgage officers, Credit Card companies etc get, bringing more power into the hands of consumers. For more information, see this post from

  2. You have the upper hand over the loan officer, because you know how you’ve handled your prior car loan(s). If you handled them good, your Auto-Enhanced Fico Scores will be higher than your Classic Fico, so you can expect more from the lender.
  3. If you handled your prior car loans badly and expect your Auto-Enhanced Fico Scores to be lower than your Classic Fico, simply try to find an auto lender that uses just the Classic Fico scores, where you’ll have your best chance of getting the lowest interest rate.
  4. When you first walk into the finance director’s office, don’t tell him what your FICO scores are. Wait until he reviews the scores himself. Then ask him what your scores are.
  5. If the scores he reviewed are higher than the ones you have, don’t say anything and just go by his scores.
  6. However, if your scores are higher, then pull them out and show him. If he has a choice in the type of scores he can use, there’s a possibility that he’ll be able to use your highest score. He will also know that you’re not a fool and that he can’t take advantage of you!
  7. Ask the lender to show you their tier levels. Tiers are basically charts lenders use that have different interest rates based on your scores. You want to see which tier your fall in. If they won’t show you, have them break it down for you verbally.

How to select a car dealer?
If you have prior auto-loan related negative information of your credit report, then you simply need to find a dealer that uses just Classic FICO scores, or one that can choose what score to use.   

Call each dealership and ask the finance person the following:

  1. What credit reporting agency do they use?
  2. Are they using FICO Auto Industry Option scores (or you can say, “FICO Auto-Enhanced Scores”), Classic FICO Scores, or both?
  3. Can they choose what score to use in the lending decision?
  4. What’s the minimum score you’ll need to get approved through your captive lender?
  5. What’s the minimum score you’ll need to get approved at the best rate by your captive lender?
  6. If you do have a major negative item on your credit report such as discharged bankruptcy, lien, or collection – ask them how these affect your loan decision?
  7. What factors other than your credit scores go into the lending decision?

Make sure not to miss our Credit Obtaining Section for some invaluable tips, and especially our Obtaining Auto Loan article!

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