If you’ve been shopping for a new vehicle, you may have also started paying closer attention to your credit score. Your credit score will have an impact on your loan & lease approval and will also determine the interest rate on your auto loan.

So what is a FICO credit score and what role does it play in financing a vehicle?

Understanding your FICO credit score:

  • Excellent

    850 - 800
  • Great

    799 -750
  • Very Good

    749 - 700
  • Good

    699 - 650
  • Fair

    649 - 600
  • Poor

    599 - 300

The three primary credit bureaus are TransUnion, Experian, and Equifax. The models used by auto lenders to score your credit are FICO® Auto Score and Vantage. The rest of this guide will focus on FICO® since it is our standard for scoring.

FICO stands for: Fair Isaac Corporation, the corporation that developed this particular credit scoring model.

FICO® is the standard for calculating buyer’s credit scores in the auto industry. The FICO scoring model uses various factors to determine a three digit score between 300 (lowest credit score) to 850 (highest credit score) representing the buyers creditworthiness.

How is my credit score calculated?

The specifics of the FICO scoring algorithm are proprietary, however there are specific factors that we know have a significant impact on credit score calculations.


Have you kept up with payments on your existing credit cards and loans- avoiding late or delinquent payments?



This is the ratio of how much debt you have compared to how much credit you are approved for.



How long have you been building credit and responsibly paying back borrowed money?



A mortgage, car loan, and credit cards are all different types of credit. How many types of loans do you have and are they managed well?



Hard credit pulls show credit scoring agencies how much money you are looking to borrow in the near future.

Age, gender, race, occupation, and where you live are NOT factors for calculating a credit score.

Your credit score may vary depending on the scoring model

Car buyers sometimes notice that the FICO credit score pulled by the dealership differs from the three-digit score they recieved from the credit monitoring service that they use.

Since FICO uses a proprietary formula to calculate a person’s credit score, it may differ slightly from the scores determined by other credit monitoring services. The variance in score is typically very slight, and tracking your credit is still a great habit to improve our score and to make sure you catch and report any identity theft attempts.


If you want to know your exact score before you begin car shopping, simply visit myfico.com.

What Credit Score Do Auto Lenders Require?

Most lending institutions require at least a 600 credit score to approve an auto loan without a downpayment.

However, it is possible to purchase a vehicle with a score a score as low as 400. There are a lot of factors that determine your loan eligibility and what interest rate you are eligible for. These factors include:

  • Are you paying money up-front. How much is the downpayment?
  • Have you had past auto loans and did you pay them well?
  • How much of a percieved risk is the bank taking to extend you this loan?

If I shop around for an auto loan, won’t multiple pulls lower my credit?

Many people are nervous to shop around for auto loans since they’ve heard that multiple credit pulls can negatively impact their credit score.

While there is certainly truth to this assumption, for the sake of comparing rates, the law states that all credit pulls that occur within 14 days must be combined into a single credit pull so that it doesn’t negatively impact your credit score. So make sure to wait to compare loans and to have your credit pulled by a lender until you know you are ready to purchase a vehicle.

Starting April 20,2020, Experian, TransUnion and Equifax will offer all U.S. consumers free weekly credit reports through April 20, 2022 at AnnualCreditReport.com to help you project your financial health during the sudden and unprecedented hardship caused by COVID-19.