Which Credit Bureau Is Used Most for Auto Loans? (2024)

FAQs

Which Credit Bureau Is Used Most for Auto Loans? ›

Which Credit Bureaus Are Used Most for Auto Loans? Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.

Originally named Fair Isaac Corporation, FICO developed the modern credit-scoring model in 1989. To this day, its scores are some of the most widely used credit scores. FICO claims its scores are used by 90% of top lenders.

The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.

Chances are, however, that your dealer might use a FICO automotive score instead of a traditional FICO score or VantageScore. Your FICO Auto Score is a specialty score ranging from 250 to 900 that weighs past car-loan payments more heavily than the traditional FICO score does.

The FICO auto score that lenders look at is measured using the 9 XT version of auto score measurement. This version is designed to take into account the past 30 months of credit behavior using data from TransUnion's CreditVision system.

One credit bureau is not necessarily used more over another. Credit bureaus are used for different services, including credit reports, credit scores and tools like identity monitoring. Experian, Equifax and TransUnion are all respected, credible bureaus that are used widely.

Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving a loan.

Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

As you can see, a 700 credit score puts you in the “good” or “prime” category for financing, making 700 a good credit score to buy a car. While it's always a good idea to get your credit score in its best possible shape before buying a car, if you're already around the 700 range you will be good to go.

What is a good APR for a car? ›

Car Loan APRs by Credit Score

Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used.

FICO score 8 and 9 are commonly used for student loans, personal loans, medical loans, credit card lines and auto loans. However, there are industry-specific FICO versions for certain types of debt as well, including auto loans, credit cards and mortgage lending.

Unlike your traditional FICO score, car dealers — more accurately lending institutions that sell auto loans to dealerships — refer to another, less known score, called The FICO® 8 Auto Score, or its competitor CreditVision.

The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.

Keep balances low on credit cards and other revolving credit: high outstanding debt can negatively affect a credit score. Pay off debt rather than moving it around: the most effective way to improve your credit scores in this area is by paying down your revolving (credit card) debt.

The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.

The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.

Credit scoring models can weigh certain information in your reports more heavily than other credit score factors. For example, one scoring model may put more emphasis on total credit usage than others. Because there are varied scoring models, you'll likely have different scores from different providers.

Equifax credit scores are provided to consumers for their own use to help them estimate their general credit position. Equifax credit scores are not used by lenders and creditors to assess consumers' creditworthiness.