| You're ready to buy a new car. | | | | how to protect yourself against slimy car dealers that |
| You've done all your homework. | | | | can use your FICO Auto Industry Optionscores against |
| You know your three FICO credit scores. | | | | you... |
| You determine that your highest FICO credit score is | | | | A Dirty Trick Car Dealers Can Play with Your FICO |
| from Equifax (also known as your BEACON score). | | | | Scores |
| So, you find a car dealer who uses your highest score | | | | Let's imagine your Equifax/Beacon FICO score is 585. |
| (which increases your opportunity to get approved at | | | | Not too good. With a score that low, if you do get |
| a good rate). | | | | approved for a car loan, you'll probably wind upwith a |
| You get to the dealership and ignore all the | | | | high interest rate and high monthly payment. |
| salespeople by going directly to the finance director's | | | | So you go to a dealership and talk with the finance |
| office. | | | | director and tell him your Equifax FICO score is 585. |
| But as the finance director reviews your credit file in | | | | The finance director then reviews your FICO |
| front of you...you can't help but think something is | | | | Auto Industry Option score. And, unknown to you, this |
| wrong. | | | | score is actually higher than the Equifax/Beacon FICO |
| Sure enough...the dealer says your Equifax/BEACON | | | | score you pulled. |
| score isn't high enough for their lowest interest rate. | | | | With this higher score, you'll get approved at a better |
| How can this be? You just checked your FICO credit | | | | rate...right? |
| scores through a few hours ago. It's possible-although | | | | Not necessarily! |
| unlikely-the information onyour credit report has | | | | Here's what unscrupulous car dealers can do. They |
| changed and that your scores have decreased since | | | | won't tell you that your auto score is higher than your |
| you last checked them. Remember, your credit scores | | | | traditional score! |
| are dynamic and will changewhenever information on | | | | They figure they have a sucker sitting in front of them. |
| your credit reports changes. | | | | So they'll try to get you financed at a higher rate |
| Your credit reports can change several times each | | | | based on the lower FICO score (thus makingmore |
| month as new information is added or updated by | | | | profit for themselves). |
| your lenders. But more than likely, your scoreswouldn't | | | | How Some Car Dealers "Play the Spread" to Get You |
| change in this situation (especially if there were only a | | | | to Pay More |
| few hours between when you checked your scores | | | | Now check this out... |
| and when the dealership reviewed yourcredit reports). | | | | It's possible that a car dealer has the ability to pull your |
| So, if your credit reports didn't change, why is the | | | | traditional FICO scores AND your FICO auto scores. |
| finance director staring at your scores with such a | | | | That means they'll have six scores onyou. It's a |
| discouraging face? | | | | guarantee that some of those scores are going to be |
| Car Dealers Can Use "Different" FICO Scores Than | | | | higher than the others. So which ones will they use |
| The Ones You See | | | | when trying to get you financed? |
| The car dealer is probably using what is known as the | | | | It depends. |
| FICO Auto Industry Option score instead of a | | | | Are you familiar with the term "spread"? It's how car |
| traditional FICO credit score. You see, car dealersnot | | | | dealers make money when they finance you. If they |
| only get to select the credit reporting agency they | | | | can quote you a higher interest rate than |
| receive FICO credit scores from...they also get to | | | | youdeserve-then they stand to make a nice chunk of |
| decide if they will use a traditional FICOcredit score or | | | | change from the bank that finances you. |
| a variation of a FICO score called an Auto Industry | | | | The only way to make a killer "spread" is to make you |
| Option score. | | | | think that you have lower scores. |
| What's the difference between these two types of | | | | So, what can you do? |
| scores? | | | | Don't despair...I can help you. |
| Not a whole lot to most people...but there's enough | | | | How to Use Your FICO Scores to Your Advantage |
| variation to make the majority of auto lenders use the | | | | when Buying a Car |
| Auto Industry Option score. The realdifference | | | | Fortunately, you don't have to fall for their dirty tricks. |
| between the two scores is that the Auto Industry | | | | Now that you know all about FICO Auto Industry |
| Option score pays a lot more attention to how you | | | | Option scores, you can protect yourself. |
| handled previous auto credit. | | | | Here's what I suggest... |
| - Have you made late payments on a current or | | | | 1. When you first walk into the finance director's office, |
| previous auto loan or lease? | | | | don't tell him what your FICO scores are. Wait until he |
| - Have you ever settled an auto loan or lease for less | | | | reviews the scores himself. Then askhim what your |
| than you owed? | | | | scores are. |
| - Have you had a car repossessed? | | | | 2. If the scores he reviewed are higher than the ones |
| - Have you had an auto account sent to collections? | | | | you have, don't say anything and just go by his scores. |
| - Did you include your car loan or lease in your | | | | 3. However, if your scores are higher, then pull them |
| bankruptcy? | | | | out and show him. If he has a choice in the type of |
| Those actions will affect your Auto Industry Option | | | | scores he can use, there's a possibility thathe'll be able |
| score more than they'll affect your traditional FICO | | | | to use your highest score. And, it will let him know that |
| score. Bottom line, if you handled yourprevious auto | | | | he doesn't have a fool sitting in front of him. He can't |
| credit perfectly, you should have a high FICO Auto | | | | take advantage of you! |
| Industry Option score-that's a good thing. | | | | How do you find out what your FICO Auto Industry |
| But what if you've had a few bumps in the auto credit | | | | Option scores are before you walk into a car |
| road in the past? You guessed it...your Auto Industry | | | | dealership? |
| Option score will be lower. You'll beperceived as a | | | | You can't. |
| greater credit risk and the auto lender may either deny | | | | Sorry. They're not for sale-at any price. Only lenders |
| you or use your lower score to justify charging you a | | | | have access to them. |
| higher interest rate. | | | | FICO would like to sell them...but there just isn't enough |
| You see, auto lenders are different than other types | | | | demand. I mean seriously, up until you read this article, |
| of lenders. And I'm not talking about their slimy ways, | | | | had you ever heard of the FICO Auto |
| leisure suits, short ties, manly hairychests, or gold bling. | | | | Industry Option score? |
| A lot of other lenders look at your whole credit picture | | | | Exactly. |
| to determine whether or not to give you a loan. But | | | | Remember, we were just given access to purchase |
| many auto lenders care about only onething...how you | | | | all three of our traditional FICO credit scores on June 11, |
| handled your past AUTO credit. That's what a FICO | | | | 2003 at 8:00 a.m. (I actually got misty thatday...what a |
| Auto Industry Option Score gives car dealers-a way | | | | geek I am.) |
| to pinpoint how you've handled whatmatters to them | | | | Only a very small percentage of the population even |
| the most. | | | | knows they have three FICO credit scores...let alone |
| So, even if everything else on your credit reports went | | | | three Auto Industry Option scores. |
| down the toilet after your bankruptcy, if you didn't | | | | So How Can You Use This Information to Help You |
| include your auto loan in your bankruptcyand never | | | | Get Your Next New Car Financed at the Best Interest |
| defaulted or missed a car payment, your Auto Industry | | | | Rate |
| scores will probably be better than your traditional | | | | 1. First, get your three credit reports. If you handled |
| FICO scores! | | | | your previous auto credit well-your FICO Auto Industry |
| What a Former Auto Finance Director Revealed to | | | | Option scores will be higher than yourtraditional FICO |
| Me | | | | scores. So expect more from the lender. |
| I recently spoke with a former finance director, and this | | | | 2. You can also ask the lender to show you their tier |
| is what she told me... | | | | levels. Tiers are basically charts lenders use that have |
| "So many people I have helped couldn't believe their | | | | different interest rates based on yourscores. You |
| scores were so high with the FICO Auto Industry | | | | want to see which tier your fall in. To see an example |
| Option score. They had included all their creditcard | | | | of an auto lender's tier schedule, click here. |
| debt and their mortgage in their bankruptcy, but they | | | | 3. If they won't show you...at least have them break it |
| reaffirmed their auto loan. What's good about the auto | | | | down verbally for you. (Personally, I like to see it with |
| score is that it truly helps the autolender concentrate | | | | my own eyes, as I never believe a wordthat comes |
| on what is important-how the customer handles his/her | | | | out of most car dealers' mouths.) |
| auto loans. | | | | 4. If you've handled your auto credit poorly...then you |
| By our dealership having the auto enhanced FICO, it | | | | should simply try to find an auto lender that uses just |
| helped 30% or more of our customers get better | | | | the traditional FICO credit scores. Whenyou find a |
| rates." | | | | lender that uses a traditional FICO credit score, you'll |
| I don't believe I'm going to say this, but I think I may | | | | have your best chance to get the lowest interest rate. |
| actually have found something good to say about car | | | | 5. Start by calling dealerships and asking the finance |
| dealers! Well, some of them, anyway... | | | | director if they use a traditional FICO credit score to |
| As you can see, the FICO auto scores can work in | | | | make their lending decision or if theyuse the FICO Auto |
| your favor, if they are used correctly. | | | | Industry Option score. |
| OK, I just wouldn't be able to live with myself if I only | | | | These steps will get you headed in the right direction. |
| said good things about car dealers. | | | | This won't be easy, as a lot of car dealers use the |
| So, in the interest of fair and balanced reporting, here's | | | | FICO Auto Industry Option score. |