FICO and Credit Scores
Car loan companies often use FICO and credit scores or credit score ratings
to determine whether or not
you qualify for an auto loan, the amount you qualify for and the cost (interest
rate and charges) of the car loan.
The cost of car ownership moves well beyond the actual price you pay for a car.
The interest rate you pay for a car loan is largely dependent on a person's FICO and
credit scores and credit score ratings. Based upon the average car loan amount, the
difference in auto financing costs could be several thousand dollars depending
on your credit score rating.
Credit Score Ratings
A credit score is a numerical expression based on a statistical analysis of a
person's credit file. Each credit reporting agency has a proprietary name for
their credit score ratings. Experian's credit score is named FICO, Equifax's credit
score is Beacon and Trans Union's is Empirica. People with higher FICO and credit
scores or credit score ratings theoretically represents a higher level of creditworthiness. Simply said,
a credit score is used to determine the likelihood that a person will repay a loan.
FICO and credit scores are primarily based on credit report information typically
sourced from the credit reporting agencies such as Equifax, Experian and Trans Union.
Car finance companies use credit score ratings to evaluate the potential risk posed by
lending money to consumers and to mitigate losses.
There are different methods of calculating credit score ratings. FICO, the most widely
known type of credit score, is a credit score developed by FICO, previously known
as Fair Isaac Corporation and is the best known and most widely used credit score
model in the United States. FICO and credit scores range between 300 and 850 with 850
being the absolute best.
Credit Score Ratings Scale
Excellent 750 +
Good 680 - 749
Fair 620 - 679
Poor 525 - 619
Bad Less than 525
The Elusive Free Credit Report
Many businesses advertise "free credit reports" however, most of these companies
require you to subscribe to credit report monitoring services
available from the credit reporting agencies or other third parties in order to
get a free credit report.
The fact is, you're entitled to one free credit report
within a 12-month period from each of the three credit bureaus but will not get
your FICO and credit scores with this report - just your payment history and
other related information about your credit history.
You can get your free credit report by visiting
www.AnnualCreditReport.com.
FICO and credit scores are available as an add-on feature of the report for a fee – usually
less than $10.00. Get your credit score ratings now directly from
www.ExperianDirect.com.
Get Equifax 3 Bureau Credit Report and Scores Now!
