While Experian and Equifax are the most popular bureaus among auto lenders and car dealers, TransUnion can also be used for auto loan decisions. And the truth is, the credit bureau lenders use when evaluating your auto loan application probably will not influence their decision too much.
What credit score do auto lenders look at? The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.
In conclusion, auto lenders use Equifax and Experian the most, while TransUnion is less used for auto loan credit checks, at least in some parts of the US.
The scoring model used in mortgage applications
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian) FICO® Score 5 (Equifax) FICO® Score 4 (TransUnion)
Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.
While Experian and Equifax are the most popular bureaus among auto lenders and car dealers, TransUnion can also be used for auto loan decisions. ... It's important to note, however, that if one or more of your credit reports is frozen, that could affect your loan application.
The credit bureaus may have different information.
And a lender may report updates to different bureaus at different times. So, it's possible that Equifax and TransUnion could have different credit information on your reports, which could lead to your TransUnion score differing from your Equifax score.
The reason that your Equifax score is lower than your TransUnion score is based on the fact that TransUnion adds personal information and employment data that is weighted into their model. The other two only report the name of your employer and do not add any weight to that fact.
PenFed Credit Union is the only loan company that uses only your Equifax credit data. In most cases, you won't be able to determine beforehand which credit bureaus your lender will use. In some cases, lenders will pull your credit report from two or even all three major credit bureaus.
What Is the Minimum Score Needed to Buy a Car? In general, lenders look for borrowers in the prime range or better, so you will need a score of 661 or higher to qualify for most conventional car loans.
Lenders want to determine that you have the ability to repay your auto loan before they finance a car. This goes beyond just running numbers based on an interest rate. Lenders should assess your income, assets, employment, credit history and monthly expenses to determine that you're able to pay back the loan.
When a car dealer runs your credit (after filling out a credit application), they will see your financial history. It will show the length of your credit history, your payment history, any outstanding debt you have, and roughly 30 different credit-related factors.
Most finance experts suggest holding back the fact that you have a pre-approval until you've settled on the price of the vehicle. ... It's possible that telling the dealer you have car financing right at the start could harm your chances to negotiate on the selling price of the vehicle you're looking at.
A credit score of around 640 to 649 is considered fair credit. Your score is below the national average of 710, but it's not in the “poor” range. You will be eligible for just about any new, used, or refinance automobile loan on the market, but you won't get the best interest rates.
A good score with TransUnion and VantageScore® 3.0 is between 720 and 780. As your score climbs through and above this range, you can benefit from the increased freedom and flexibility healthy credit brings. Some people want to achieve a score of 850, the highest credit score possible.
TransUnion uses most of the same personal information that Equifax does in scoring your credit; however, TransUnion may find certain aspects of your credit history more important than Equifax does. ... Banks may use your TransUnion report to verify your employment information.
The Equifax credit score model uses a numerical range between 280 and 850, and FICO score models use a range between 300 and 850. In both cases, higher credit scores indicate lower credit risk.
FICO scores are used in over 90% of lending decisions making the FICO® Basic, Advanced and Premier services the most accurate for credit score updates.
The Equifax Credit Score ranges from 280-850. It is calculated using information in your Equifax credit report. The Equifax credit score is an educational credit score designed to give you an idea of where your credit stands.
Credit Karma receives information from two of the top three credit reporting agencies. This indicates that Credit Karma is likely off by the number of points as the lack of information they have from Experian, the third provider that does not report to Credit Karma.
But how accurate is Credit Karma? In some cases, as seen in an example below, Credit Karma may be off by 20 to 25 points.
Many consumers are more familiar with FICO scores, as VantageScore is a more recent development, so you may be wondering if a TransUnion credit score is accurate. TransUnion VantageScore is, in fact, accurate — based on that credit score model.