Consumer Car Buying Advice Blog

Keeping score with what lenders will see when applying for high risk car loans

What we know

Car buyers with credit problems often don’t understand what their credit scores are or what they mean even before they apply for an auto loan.

At Auto Credit Express we’ve seen this happen too often in the more than two decades we’ve been helping buyers with less than perfect credit find dealers for their best chance at approved car loans. Our website even contains a resources section that examines the effects of bankruptcy and repossession as well as the topic covered today: the importance of viewing and understanding the different types of credit scores.

Scores and reports

Before applying for a car loan, applicants should order their credit reports and credit scores (one of each from Equifax, Experian, and TransUnion). One report per year per bureau is free and they can be ordered at www.annualcreditreport.com. Credit scores, however, are not free and you’ll need to pay for one from each of the bureaus.

This process can be simplified by paying a fee to sites such as www.FreeScore360.com where you can receive all three reports and all three credit scores at the same time.

Those credit scores

All three bureaus use a version of still the most widely-used score from FICO. Equifax calls theirs a BEACON score, at Experian it’s called the Experian/Fair Isaac Risk Model while at TransUnion it’s known as an EMPIRICA score.

The bureaus also offer lenders the option of a new score all three jointly developed that competes with FICO that’s called VantageScore.

In a perfect world, all three of your VantageScores or FICO scores would be the same. But the fact is they aren’t.

Why there are differences

Unless your credit file is fairly new, there will usually be differences in each of your credit reports and credit scores because:

1.    Some creditors might report to only one or two of the bureaus.
2.    It may take one bureau longer to update a new creditor
3.    It may take one bureau longer to delete an old credit file
4.    One, two, or even all three reports may be showing inaccurate or incomplete information

These reasons and more can result in credit score differences. To complicate matters furthers, car dealers typically request an “auto enhanced” credit score that emphasizes auto loan performance. This means the score they are looking at could also be different.

Classifying credit scores

Once you’re familiar with your credit scores, it’s time to see where they fall within typical lender classifications and what kind of car loan you might qualify for.

As an example, here is Experian’s classification system for both types of credit scores:

Super prime:
FICO Score: 740 plus
VantageScore: 801-990

Prime:
FICO Score: 680-739
VantageScore: 701-800

Non-prime:
FICO Score: 620-679
VantageScore: 641-700

Subprime:
FICO Score: 550-619
VantageScore: 601-640

Deep subprime:
FICO Score: less than 550
VantageScore: 501-600

In this case, super prime is the best of the best, prime is excellent and near prime is fair credit. Falling into either the subprime or deep subprime category means you’ll probably need to apply for a subprime auto loan.

The Bottom Line

By first ordering your credit scores before you begin the car shopping process you’ll typically know which type of auto loan you’ll need to apply for.

If your credit scores reflect that you may have problems applying for car credit from a traditional lender, here is another tip: Auto Credit Express specializes in helping applicants with car credit issues find dealers for their best chances at auto loan approvals.

So if you’re ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.

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