Imagine that you are preparing to buy a car. You've crunched the numbers to form your budget, you've done your research, and you've pulled your credit reports and score. But when you head to the dealership and start the paperwork process, you notice that you aren't qualifying for the terms you believed you would. How come? It may be because the dealer may be working with a different credit score than the one that you have obtained.
Why Is The Dealer's Credit Score For Me Different Than the One I Saw?
Checking your credit reports and credit score is a worthwhile step to take when preparing to finance a car. Doing so allows you to do some research on the terms consumers with similar credit profiles are able to qualify for, and it lets you know where you stand.
But then you notice that the dealer or lender you are trying to get an auto loan with has a completely different credit score for you. This may be because they are using an automotive-weighted credit report, which specifically amplifies your past performance with auto loans.
It's common practice for car dealers and auto loan providers to evaluate an applicant's installment credit history and performance. Installment credit accounts are those where you agree to pay back borrowed money over a set period of time in periodic payments, like loans and mortgages.
This type of information is very valuable for dealers and lenders in the industry. They believe a potential borrower's past performance with these types of accounts will be indicative of their future performance.
There are even automotive credit scores out there, which are weighted toward your past and current auto loan accounts and the chances of them incurring late payments. You could have a higher auto score than a standard credit score, or vice versa. If you've never gotten an auto loan before, or if your car loan history is marked by some negative information, your auto score will most likely be lower than your standard credit score.
Even the Credit Bureaus on are Board
So useful have these specialized reports and scores proven to be, even the credit reporting agency Experian has gotten involved. Since 2008, Experian has been providing Automotive Credit Profiles(SM) to those in the automotive industry.
Experian's Automotive Credit Profile(SM) places a borrower's automotive financing information front-and-center so dealers and lenders can efficiently match consumers with the right loan.
What's on it exactly? Right after the basics, it dives into an overview of a person's automotive credit history, including a consumer's:
- Installment credit balance
- Past and current delinquent account counter
- Automotive profile summary, which includes: Past and open loans and the amount financed, monthly payment amount, length of term, months remaining and payment status
- A FICO Auto Score
After that, it goes back to credit report basics like public records information, a list of a person's installment and revolving credit accounts, and inquiries. You can check out an example of this type of report on Experian's website.
What If My Automotive Credit History is No Good?
You may be wondering what to do if you need a car and your automotive credit history isn't strong. Or maybe you've never gotten an auto loan and it's nonexistent. If this is the case for you and you are in need of an auto loan, you may need the help of Auto Credit Express.
We are connected to a nationwide network of special finance car dealers. They have programs to meet any credit situation, and we can help you jumpstart the process. All you need to do is fill out our free and secure online application to get started.