Increasingly there are two types of credit scores that people with both good and bad credit have to deal with
What we know
At Auto Credit Express for the past two decades we’ve been helping applicants with car credit issues find dealers that can get them financed for affordable and reliable vehicles so that they can repair their credit and move back into conventional financing as soon as possible.
We also continue to stress the fact that knowing your credit scores and what is contained in your credit reports is an important preliminary step before applying for credit through one of our participating dealers.
But since 2006 there has been an additional credit score type.
Developed by the three major credit bureaus, VantageScore uses a numerical rating of 501 to 990 (unlike the FICO score of 300 to 850) and then assigns a letter grade to the score:
• 901-990 equals “A” credit
• 801-900 equals “B” credit
• 701-800 equals “C” credit
• 601-700 equals “D” credit
• 501-600 equals “F” credit
In addition to a different scoring system, VantageScore also uses a different scoring formula. Since Fair Isaac owns the system, as well as the scoring model, VantageScore could not duplicate the scoring system, so that had to be changed. Here are some of those differences (the first column is VantageScore, the second column FICO):
Score Payment history 32% 35%
Balances 15% 30%
Credit Utilization 23% 15%
Depth of Credit 13% 10%
Recent credit opened 10% 10%
Available credit 7% 0%
What it means
At this point in time, it’s hard to say what all of this means. As it is, most consumers have a hard enough time trying to manage their credit history with three separate bureaus. For example, if there is inaccurate information listed on all three credit reports and you ask to have it removed, two bureaus may remove it while the third might not.
Throwing in a second credit score couldplicate things even further, although as of early last year only 7 to 10 percent of the lenders out there are using VantageScore. Also, if the new scoring system works to the advantage of the consumer – especially those with new or limited credit histories – so much the better. But unfortunately we can’t say for sure that this is the case and if VantageScore further limits applicants from having banks extend them credit, the consumer loses.
One more thing
Finally, if you’ve been turned down for a conventional auto loan, we want you to know that Auto Credit Express specializes in placing credit-challenged applicants with dealers that can give them their best chance at getting approved auto loans with lenders that do report both loans and loan payments to the credit bureaus.
So if you’re ready to take that first step in improving your auto credit, you can begin now by filling out our online auto loans application.