What credit check do car companies use?
Asked by: Marlen Corkery DDS | Last update: January 10, 2026Score: 4.4/5 (56 votes)
What credit check do car dealers use?
However, many people don't know what credit score car dealers actually use. 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.
What credit score do car companies look at?
Auto loan lenders generally check an applicant's FICO Auto Score, which ranges from 250 to 900, or their VantageScore, which ranges from 300 to 800. These scores reflect an applicant's general borrower risk profile, and they help lenders predict how likely a borrower is to repay their auto loan on time.
Do dealerships use TransUnion or Equifax?
Auto lenders may rely more on Equifax and Experian for credit report insights, but TransUnion also sells consumer data to a number of automotive lenders. Credit scoring models such as FICO® Auto Score 9 generate a credit score based on the debt and payment information in a consumer's credit report.
What is the minimum credit score to buy a car?
According to Car and Driver, “Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.”
What Credit Score Do Car Dealers Use?
What credit score do you need to buy a $30000 car?
There is no minimum credit score required to buy a car, but most lenders have minimum requirements for financing. Most borrowers need a FICO score of at least 600 to get a competitive rate on an auto loan.
Can I get a car with a 500 credit score?
Yes, it's possible to finance a vehicle purchase with a 500 credit score or even below that. Keep in mind, though, that you can generally expect limited options, as well as high interest rates and fees. If possible, try to improve your credit before applying.
Is 700 a good credit score to buy a car?
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.
Which credit score is most accurate?
FICO® and VantageScore® are the two most popular credit scoring models today. FICO and VantageScore credit scores are equally reliable and accurate, based on the specific scoring model that's being used. Tools are available that allow you to check and monitor your credit score for free, with no impact to your credit.
When a car dealership runs your credit, does it go down?
A dealership checking your credit score is a soft inquiry and won't affect your credit. Any hard credit check triggered by a loan application will appear on your credit report, shaving points from your credit score.
Do car dealerships check your bank account?
While not always required, your recent bank statements can help the dealership both verify your current residency and income. You might use them to show newer or less common income sources that aren't reported on pay stubs or your last tax documents.
What credit score is fair for a car?
A target credit score of 661 or above should get you a new-car loan with an annual percentage rate of around 6.7% or better, or a used-car loan around 9.63% or lower. Superprime: 781-850. 5.08%.
What kind of background check does a car dealership do?
Criminal History Search
These can be performed at any level, from county to nationwide. A criminal history search reveals past convictions, ranging from felonies to misdemeanors to reportable traffic violations.
Why do car dealerships run your credit so many times?
Although dealerships may have a preferred lender, some dealerships choose to "shotgun" your credit information to multiple lenders, which is a tactic dealers use to make lenders compete to give you the best rate. Many dealers contact around five lenders and then choose a single loan offer to present to you.
Which credit bureau do most lenders use?
Although Experian is the largest credit bureau in the U.S., TransUnion and Equifax are widely considered to be just as accurate and important. When it comes to credit scoring models, however, there is a clear winner: FICO® Score is used in roughly 90% of lending decisions.
What banks do car dealerships use?
US Bank – A trusted lender for all of your dealer finance needs. US Bank is a part of the Route One and Dealertrack network of lenders. Ottomoto – Modern lending app for car dealers. Ottomoto provides a faster, easier and more secure way for your customers to finance their vehicle.
What is the most damaging to a credit score?
- Making a late payment. ...
- Having a high debt to credit utilization ratio. ...
- Applying for a lot of credit at once. ...
- Closing a credit card account. ...
- Stopping your credit-related activities for an extended period.
Which credit score is most important when buying a car?
Your credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
Do banks use TransUnion or Equifax?
An Equifax credit score isn't used by lenders or creditors to assess a consumers' creditworthiness. Instead, many lenders use FICO Scores® to help determine a potential borrower's creditworthiness. FICO uses credit scores from the three reporting agencies, including Equifax and Transunion, to determine their score.
What credit score do you need for an $50,000 car loan?
MINIMUM CREDIT SCORE FOR A CAR LOAN
However, most lenders look for a threshold of at least 600. However, this may vary depending on the lender, car, and loan type. A score of 700-850 is what most lenders consider ideal. Borrowers in this range can expect to get offered lower interest rates and more flexible loan terms.
How to get 900 credit score?
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
What is the 20 3 8 rule?
The 20/3/8 Rule is a guideline designed to keep your car purchase within your financial boundaries. It consists of three parts: a down payment of at least 20% of the car's price, limiting the loan term to three years, and ensuring that your car payment does not exceed 8% of your monthly income.
Is $5000 a good down payment for a car?
In general, you should strive to make a down payment of at least 20% of a new car's purchase price. For used cars, try for at least 10% down. If you can't afford the recommended amount, put down as much as you can without draining your savings or emergency funds.
Can I get a 30k car with a 650 credit score?
If you have a credit score of 650, you might still be eligible for a car loan; the only caveat is that you may be subject to a higher interest rate. A credit score of 650 could land you an interest rate as high as 30%. As a result, you'll have to pay a 20% down payment (at minimum) of the entire amount.
How much is a car loan for $25,000?
Example: A six year fixed-rate loan for a $25,000 new car, with 20% down, requires a $20,000 loan. Based on a simple interest rate of 3.4% and a loan fee of $200, this loan would have 72 monthly payments of $310.54 each and an annual percentage rate (APR) of 3.74%.