Everyone knows that good credit is the key to getting the best loan when purchasing a vehicle. Do you know what the rating actually means and how does it affect your ability to obtain a loan? Also, did you realize that your FICO score is not the only type of credit score that they use? If you didn’t, you are a not alone as many believe that they only use one of the three major credit companies to gain your score.
Let us first discuss what the two types of credit scores that banks use to determine your creditworthiness when your application is submitted to them. The first, and most common is the FICO score. This is created by the Fair Isaac Corporation and is used by many lenders. The score ranges from 300 to 850. Those who fall from 300 to 579 points are considered to have very poor credit. The next level up is 580 to 669. Those in this range are considered to have fair credit. 670 – 739 is the good range, while 740-799 is very good. Those with an 800 FICO score and above have exceptional credit and will be offered the best loan types.
The second type of credit score is known as the Good VantageScore which was developed by the three major credit bureaus. These include Experian, Equifax, and TransUnion. Like the FICO score, this range is from 300 to 850, but the breakdown is different. Those in the very poor credit rating have a score from 300 – 549. 550 to 640 is considered to be poor while 650 to 699 are fair credit scores. Those with 700 to 749 have good credit and those from 750 to 850 have excellent credit.
With this knowledge, it is important to understand which credit score rating your are receiving when you get your credit reports. This will help you with a better understanding of what your actual credit is like. If you would like more information on how your automobile loans are affected by your credit scores contact the finance department at Williams Brother’s Chrysler, Dodge, Jeep, and RAM. They will be able to assist you with what you will need to prepare for your loan.