Ready to buy a new car.
've done all the homework.
You know that three FICO credit score.
you are determined to provide the highest FICO credit score is from Equifax (also known as the Tax score).
So, if you find a car dealer who uses your highest score (which increases the possibility of credit at a good pace).
get the dealership and ignore the salespeople directly to the CFO's office.
But as the financial director will review your credit file in front of you … you can not help but think that something is wrong.
Indeed … the dealer says your Equifax / TAX score is not high enough, the lowest interest rate.
How can this be? You just checked through FICO credit score http://www.myfico.com/12 a few days ago. It's possible – though unlikely – the information on your credit report has changed and that scores decreased since you last checked them. Do not forget your credit score is dynamic and will change when information in the credit reports changes.
The credit report can change several times a month new information is added or updated by the lenders. But more than likely, your scores would not change this situation (especially if only a few hours when you checked your scores and when the dealership reviewed your credit reports).
So when the credit reports did not change, why is the finance director staring at your scores with a disappointing face?
Car Dealers Can Use "different" FICO scores, like those, see
car dealer is likely to be what is called the FICO auto industry Option score instead of the traditional FICO credit score. You see, car dealers will not only get to choose to receive a credit reporting agency FICO credit scores … they also get to decide if you can use a traditional FICO credit score or FICO is a version called the Auto Industry Option score.
What is the difference between the two types of scores?
Not much to most people … but enough variation to make the majority of auto lenders use the Auto Industry Option score. The real difference between the two scores, the automotive industry Option score pays a lot more attention on how to handle the former auto loan.
– already in default of payment of current or previous auto loan or lease?
– Did you arrange a car loan or lease for less than you owed?
– There's a car repossessed?
– had an auto account sent to collections?
– she took the car loan or lease in the bankruptcy?
these measures will affect Auto Industry Option score more than your traditional FICO effect. The point is, if you treat the former auto loan properly, you must have a high FICO score option automotive industry – that's a good thing.
But what if you've had a couple bumps in the road auto loan in the past? You guessed it … the automotive industry, Option score will be lower. It will not be perceived as a greater credit risk and the auto lender may either deny or use the lower score to justify charging a higher interest rate.
You see, auto lenders different than other types of lenders. And I'm not talking about a slimy ways, leisure suits, short ties, manly hairy chests, or gold bling.
There are many other lenders look at your credit overall picture of whether or not to give you a loan. But many auto lenders care about only one thing … how you handled the last car loan. That's what a FICO Auto Industry Option Score gives car dealers – in a way that is exactly how I deal with what matters to them the most.
So, if everything else on the credit reports went down the toilet after bankruptcy if it does not include auto loans for bankruptcy and never defaulted or missed a car payment, the automotive industry scores will probably be better than your traditional FICO score!
What the former Auto Finance Director revealed to me
recently talked to a former chief financial officer, and that's what he told me …
"all I have helped could not believe their scores were so high on the FICO Auto Industry Option score. already included all credit card debt and mortgage bankruptcy, but confirmed auto loan. What is good for the auto score that truly helps the auto lender concentrate what's important. – that the customer handles his / her auto loans
our auto enhanced FICO distribution has it helped 30% or more of our customers receive better prices "[1945901million]
. I do not think I'm going to say, but I think we really found something good to say car dealers! Well, some of them, and besides …
As you can see, the FICO auto scores can work in your favor if used correctly.
OK, I'm just not be able to live with myself if I only said good things car dealers.
So in the interest of fair and balanced reporting, here's how to protect yourself from slimy car dealers, use FICO Auto Industry Option
against scores …
a dirty trick Dealers can play the FICO results
Imagine Equifax / Beacon FICO score 585. not too good. The score that low, if the already approved a car loan, you'll probably wind up with a high interest rate and high monthly payment.
So you go to the dealership and talk to the finance director and tell him your Equifax FICO score of 585 chief financial officer, will review your FICO Auto Industry Option score. And unknown to you, this score is actually higher than the Equifax / Beacon FICO pulled.
With a higher score, you can get a license for a better rate … right?
Not necessarily!
Here's what you can do unscrupulous car dealers. They will tell you that the auto score is higher than the traditional score!
It is believed that there is a sucker sitting in front of them. So you'll have to request that a higher degree financed by the lower FICO (thus more profit for themselves.)
How Some Car Dealers "Play the Spread" get to Pay More
now check this out …
might be able to pull a car dealer in the traditional FICO scores, the FICO auto scores. This means that you and six scores. This guarantees that some of these scores will be higher than the others. Yes, what are they going to use when trying to get financing?
it depends.
Do you know the "spread"? This is how car dealers make money when they finance you. If they can quote a higher interest rate you deserve – you stand to make a nice chunk of change in your bank's finances.
The only way to make a killer "spread" is to think that the lower scores.
So, what can you do?
do not despair … I can help.
How to Use Your FICO results to Your Advantage when buying a car
Fortunately, you do not need to fall in the dirty tricks. Now that you know all about FICO scores automotive Option, it can be controlled. Here's what I suggest …
1. When you first step into the CFO's office, do not tell him what the FICO scores. Wait until he reviews the scores. Then ask what the scores.
2. If the scores are reviewed are higher than those that have, do not say anything and just go with his scores.
3. However, if the scores are higher, then pull them out and show it to him. If you have a choice of the type of scores can be used, there is a possibility that he will be able to use the highest score. And you know that he is not a fool sitting in front of it. He can not take advantage of you!
How do you find what your FICO Auto Industry Option scores are before you walk into a car dealership?
Can not.
Unfortunately. They're not for sale – at any price. Only lenders have access to them.
Fico want to sell them … but not enough demand. I mean, seriously, until you read this article, we have had previously heard of the FICO score auto industry Option?
Exactly.
Remember, we are only buying access to all three of our traditional FICO credit scores for June 11, 2003 at 08:00 (I actually have a foggy day … what a geek I am.)
Only a very small percentage of the population does not know that there are three FICO credit scores … let alone three Auto Industry Option scores.
So how can you use this information to help new car finance Get the best interest rate
1. First, get your three credit reports. If handled previous auto credit well – the FICO Auto Industry Option scores will be higher than the traditional FICO score. So expect more of the lender.
2. You can also ask your lender to show you the tiers. Levels are basically charts lenders use that are based on different rates of scores. Do you want to see which layer of the decline. To see an example of an auto lender tier schedule, click here.
3. If they do not show it … at least they are broken in for you. (I like to see for myself personally, because I do not believe a word that comes out of most car dealers mouth.)
4. When the auto loan is treated poorly … then you simply must find a auto lender that is just the traditional FICO credit score. If you find a lender that is a traditional FICO credit score, you will have the best chance to get the lowest interest rate.
5. Start calling dealerships and asks the finance director if they use a traditional FICO credit score to make lending decisions, or if you use the FICO Auto Industry Option score.
These steps will get you headed in the right direction. It will not be easy, because many car dealers use the FICO Auto Industry Option score.