What is a FICO Auto Score 9? A Deep Dive into this Specialized Credit Score

Lenders will look at your credit report and score when you apply for an auto loan to see how creditworthy you are. But not all credit scores are the same. Auto lenders rely heavily on your FICO Auto Scores, which are unique credit scores designed to measure the risk of lending money for cars. In this article, we’ll look at the most recent version of FICO Auto Score 9 to help you understand what it is, why it’s important for auto loans, and how you can check and improve yours.

What Are FICO Auto Scores?

FICO Auto Scores are industry-specific credit scores made by the Fair Isaac Corporation (FICO) to help auto lenders figure out how likely it is that borrowers will pay their bills on time. Like regular FICO Scores, which range from 300 to 850, FICO Auto Scores range from 250 to 900.

While both FICO scores and FICO Auto Scores are based on information from your credit reports, FICO Auto Scores are different in how they look at your credit history. Things like how much credit you use overall and how old your credit is are important, but your FICO Auto Score is mostly based on how well you’ve paid your auto loans in the past. This customized model tries to find any credit habits related to cars that point to a higher chance of default or late payments on a new car loan.

Introducing FICO Auto Score 9

FICO regularly updates their credit score models to make them more accurate at predicting future events. The newest version, FICO Auto Score 9, was released in 2020 and is designed specifically for auto loans.

Some of the key updates in FICO Auto Score 9 include:

• Less emphasis on medical collections – Auto Score 9 will disregard paid medical collections and give less weight to unpaid medical collections compared to non-medical ones. This reflects research showing medical debt is less correlated with auto loan repayment risk.

• Renewed focus on auto loan data – Auto Score 9 places more importance on your specific auto credit history, especially severe delinquencies. If you have past auto loan issues, it will be harder to offset them with positive credit behavior in other areas.

• Inclusion of rental payment history – Applicants who reliably pay monthly rent on time can now get credit for that in their Auto Score 9, whereas it didn’t impact previous versions.

• Exclusion of paid collections – No matter the type, collections accounts paid in full will be excluded from the Auto Score 9 calculation. This change aims to encourage consumers to pay off collections.

What is a Good FICO Auto Score for Auto Loans?

Since lenders all have their own standards, there is no single score cutoff for what is considered “good” credit in auto lending. Industry experts recommend a FICO Auto Score of 700 or higher as a good starting point before applying.

Here are some general credit tiers and likelihood of approval based on your FICO Auto Score range:

• 781-900 – Excellent credit. Highest approval odds for lowest rates.

• 660-780 – Good credit. Very strong chance of approval at competitive rates.

• 620-659 – Fair credit. Decent loan approval odds but may not get best terms.

• 500-619 – Poor credit. Loan approval difficult and higher interest rates likely.

• 250-499 – Very poor credit. Low approval odds for most standard loans. May require subprime financing.

Actual loan decisions depend on the lender’s policies and market rates at the time. Those with fair or poor FICO Auto Scores may improve approval chances by applying with subprime auto lenders focused on higher-risk borrowers.

Checking Your FICO Auto Score

Since auto lenders rely so heavily on FICO Auto Scores, checking yours can give helpful insight before submitting an application. Unfortunately, FICO Auto Scores are not included with free credit scores from Credit Karma or your credit card company.

Here are a few options for accessing your FICO Auto Scores:

• Order directly from myFICO.com for $19.95-$59.85 depending on selected options.

• Sign up for Experian’s credit monitoring service for $24.99/month. Includes your Experian-calculated FICO Auto Score 8.

• Ask your auto lender if they offer complimentary FICO Auto Score checks for applicants.

When checking scores, be sure to verify which FICO Auto Score model version you are viewing. The latest FICO Auto Score 9 may show a different number than previous versions like Auto Score 8. Also keep in mind that different credit bureaus may calculate slightly different FICO Auto Scores based on their credit data.

How to Improve Your FICO Auto Score

The good news is the ways to boost your regular FICO Scores can also help strengthen your FICO Auto Scores. Here are some top tips for credit repair to improve auto loan approval odds:

• Pay all bills on time – Payment history is critical. Set up autopay if needed to avoid missed payments.

• Pay down credit card balances – Lower utilization on revolving accounts can help.

• Limit hard credit inquiries – Too many applications hurt, so only apply for credit selectively.

• Pay off collection accounts – Settling unpaid collections can improve your FICO Auto Scores.

• Correct credit report errors – Dispute any inaccurate negative items dragging down your scores.

• Become an authorized user – Being added as an authorized user on a spouse or family member’s older credit account can give your credit a boost.

• Wait for time to improve scores – Negative marks like late payments stay on your reports for years. Older bad credit history hurts less.

The Takeaway

FICO Auto Scores play an outsized role in auto lending decisions. Checking your latest FICO Auto Score 9 before applying for an auto loan can help set realistic expectations for loan approval and interest rates. Monitoring your score over time is also useful for gauging the success of your credit-building activities. While expensive paid options provide the most detail, free credit scores can also give you a general sense of your credit health as you work toward improving your FICO Auto Scores.