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Regular Contributor
remarc
Posts: 170
Registered: ‎03-05-2012
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Auto Enhanced Scores? what is it?

How do they work this out? I know its kind of a secret per say and we can not find out our own score, but whats included in it all to make a score and is it usually higher than you fico if you have perfect history of car loans and repayments?

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Revelate
Posts: 9,648
Registered: ‎12-30-2011
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Re: Auto Enhanced Scores? what is it?

It simply weights auto loans and possibly other installment loan (mortgage, personal, anecdotally not student from an F&I guy who's seen hundreds of reports/scores) history heavier than revolving tradelines.

 

There's no real magic to it, but just as a couple of illustrative examples:

 

If your derogatories are all on credit cards and you have perfect installment and especially auto loan history, your auto-enhanced score will almost assuredly be higher than your standard, or bankcard-enhanced.

 

If the situation is reversed, your auto-enhanced score can be lower, sometimes markedly so.

 

The same goes for if you have no auto-loan history on your record at all, anecdotally there's a first time buyer penalty that can be fairly substantial when it comes to one's auto-enhanced score.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Regular Contributor
remarc
Posts: 170
Registered: ‎03-05-2012
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Re: Auto Enhanced Scores? what is it?

Thanks for your response

 

so question. the longer you have auto loan and always pay on time the better your auto enhanced score will be? does it matter how much your monthly payments are? say will you score be better if your payments are $400 a month compaired to $200 a month or is it just how you repay them?

 

another question: if you have a 30 day late on a CC which is a few years old does this have effect on your auto loan?

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Revelate
Posts: 9,648
Registered: ‎12-30-2011
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Re: Auto Enhanced Scores? what is it?


remarc wrote:

Thanks for your response

 

so question. the longer you have auto loan and always pay on time the better your auto enhanced score will be? does it matter how much your monthly payments are? say will you score be better if your payments are $400 a month compaired to $200 a month or is it just how you repay them?

 

another question: if you have a 30 day late on a CC which is a few years old does this have effect on your auto loan?


A 30 day late on a CC from a few years back is about as minor as one can get as far as derogs go, and will likely count even less on an auto loan but that's a swag.

 

In general the longer you have a tradeline for, the better it looks from a FICO perspective; however, I tend to think anything over six months starts experiencing diminishing returns as far as seasoning goes.  That's regardless of FICO flavor used.

 

AFAIK, FICO only cares about the payment history, and not the payment amount.  That may however factor into some random lender's underwriting decision, but I don't personally worry about that.  The payment amount assuming it's still owed, will certainly be factored into any DTI calculation either for a mortgage, or an additional car loan, or perhaps other products.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Regular Contributor
remarc
Posts: 170
Registered: ‎03-05-2012
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Re: Auto Enhanced Scores? what is it?

With regards to your last part & btw thanks for being so helpful.
If you already have a auto loan & say that loan is currently $10000 & then u want to trade your car in but u owe $10000 but u go into a credit union to get pre approved - do they take into account your current monthly auto loan and base a pre approved offer with that in mind or do they say- your going to trade that car so really u have no auto loan payments a month. Because I feel like if your already paying so much a month adding another auto loan to that would be hugely adverse on your income & debt ratio.
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BlueHusky
Posts: 193
Registered: ‎04-01-2012
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Re: Auto Enhanced Scores? what is it?

Do all auto loan applications use auto enhanced? I am looking to buy my first car, and was confident of a top tier interest rate because my credit scores are in the high 700s, almost 800 range...but this is all due to credit cards. I've never had an auto or mortgage loan. Does this mean I will get a higher APR no matter what?? Are there places that doesn't use auto enhanced?? I was budgeting only basing my calculations on the top tier APR..




Starting Score: 583 (CreditKarma, 2009)
Current Score: 783 (Walmart Free FICO, March 20, 2012), 774 (Equifax, BoA Pull, 2/20/13)
Goal Score: 800+


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Regular Contributor
remarc
Posts: 170
Registered: ‎03-05-2012
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Re: Auto Enhanced Scores? what is it?

Not too sure mate. Try your CU. u will pay a little higher than normal even with good Fico scores because you have never had auto loan before.

But don't worry - everyone has to start somewhere and after a years worth of auto loan history u can refinance.
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Revelate
Posts: 9,648
Registered: ‎12-30-2011
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Re: Auto Enhanced Scores? what is it?


remarc wrote:
With regards to your last part & btw thanks for being so helpful.
If you already have a auto loan & say that loan is currently $10000 & then u want to trade your car in but u owe $10000 but u go into a credit union to get pre approved - do they take into account your current monthly auto loan and base a pre approved offer with that in mind or do they say- your going to trade that car so really u have no auto loan payments a month. Because I feel like if your already paying so much a month adding another auto loan to that would be hugely adverse on your income & debt ratio.

I think if you tell them what you're planning to do, they'll work with you.  Similarly to rent not be factored into a mortgage application, the banks assume you're going to be giving it up.  Auto loans (or even current mortgages) can go either way though, so I'd simply tell them what I planned so they could figure it out accordingly.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Revelate
Posts: 9,648
Registered: ‎12-30-2011
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Re: Auto Enhanced Scores? what is it?


BlueHusky wrote:

Do all auto loan applications use auto enhanced? I am looking to buy my first car, and was confident of a top tier interest rate because my credit scores are in the high 700s, almost 800 range...but this is all due to credit cards. I've never had an auto or mortgage loan. Does this mean I will get a higher APR no matter what?? Are there places that doesn't use auto enhanced?? I was budgeting only basing my calculations on the top tier APR..


Some do not, but unfortunately I couldn't begin to tell you who Blue.  I recall your history, and honestly you're gold-plated anyway I can't imagine you wouldn't get top tier financing on a vehicle; even if you lost 60 points (or higher even in some cases) you'll still qualify for top tier financing.

 

As a general rule smaller lenders (CU's, read not national banks) will be more likely to use a regular classic FICO.

 

As it behooves someone to shop around anyway, in your situation I'd simply run through the usual list of suspects (any CU's you have membership with, any other local ones possibly, and maybe your primary bank depending who it is) take whatever I got, and then put it on the table for the dealer and ask if they can beat it.  If you're buying a new car, I suspect they will with your history, you should be fine.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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New Member
ilsstp
Posts: 3
Registered: ‎06-27-2011
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Re: Auto Enhanced Scores? what is it?

[ Edited ]

The problem I have with this is that dealers are making credit based decision based on a score or formulation of some sort that the average person doesn't know about or have access to.  It's fine in my opinion if each lender or business wants to have their own credit/tier criteria but basing credit lending decisions on a formula that the average person doesn't have access to or awareness of is shady business.  I think if they are going to deny (or approve) you credit at a dealer that the lender should be able to provide you with the facts that it was based on auto-enhanced measurements or straight up credit score. If they are not pulling your credit score but pulling/formulating an auto-enhanced credit score they should tell you. 

 

To me, just seems like another way lenders try to confuse the average consumer.

 

Just my 2-cents.


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