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Re: What do lenders consider a Subprime score?

Established Member

Re: What do lenders consider a Subprime score?

I have a big question: Does the FICO auto enhance scores look more on your recent auto payments or does it focus more on past auto payments? Does it weigh them equally? Does your current auto loan payments matter more?
Also, will a manual review by the dealer focus more on how I'm currently paying? I had two baddies in the past: one CO in 2015 but paid in full. The most recent was in March 2018--CO but paid in full in March 2018--Cosigner on a car loan that went bust, but showing paid--0 balance. I've had my own car loan since 2015--NEVER LATE.

I would love to get some reponses. Thanks.
Message 1 of 9
8 REPLIES
Frequent Contributor

Re: What do lenders consider a Subprime score?

You should be fine; I don't believe old missed payments on car loans have much effect on FICO Auto-enhanced scores. The algorithms seem to focus more on your recent performance.

 

Back in 2014, I missed one payment to Toyota Motor Credit. As a result, my TU and EX reports show one 30-day late on an auto loan payment. That was enough for Toyota Credit to deny me a loan on a new Toyota Highlander in 2016; I went with Chase instead because I have a good relationship with them. 

 

Now, however, that old late payment seems to have a lot less relevance to auto finance. My current FICO Auto 8 scores are EX: 722, TU: 736, EQ: 725. I had no trouble getting top-tier financing from both Mercedes Benz Financial Services and Ford Motor Credit last month.

 

By the way, "manual review" by dealers seems pretty cursory. Both the Mercedes and Ford dealerships hard-pulled my scores just to make sure I was eligible for top-tier financing before they sent the deal to MBFS and FMC. Then, both finance companies pulled my FICO Auto 8 scores again to lock in financing. It was irritating as I told both dealerships they got one HP and not more! But I really didn't mind since the financing deals at the end of the year were so good. Just be prepared for both the dealer and their finance companies to pull your scores, especially if you're seeking top-tier financing.

 

Good luck!

 

Message 2 of 9
Frequent Contributor

Re: What do lenders consider a Subprime score?

Your auto-enhanced scores are just a different scoring system that weighs installment loan's a little heavier, among other things. Your auto-enhanced scores aren't weighed on past auto loan's rather just a different scoring system that focuses on installments. I have seen people with no past auto loan history score well into the 800's on auto-enhanced version's.

 

As far as what is considered a sub-prime score, for me that is a difficult question to answer because it really depends..I have personally seen a 499 TU auto-enhanced person obtain 9.99% through WFDS because they had excellent payment history but a VERY recent foreclosure, with a large down payment they obtained a "decent" rate considering their score.

 

Many lender's don't use just a standard rate sheet that has a designated rate based on score/vehicle year/term. Alot of captive lender's use internal scoring systems called scorecard's that look deeper than one's score. They focus on Ability/stability (PTI/DTI/job time/residence time) LTV, past credit history, and so on- rather than just the score.

AMEX BCE ($39,500) CITI AAdvantage ($20,500) Region's Platinum Card ($14,400) Discover IT ($23,000) Macy's ($7,000) Chase FU ($10,000) Barclay's Aviator ($22,000) TU:778 EX: 781 EQ:791
Message 3 of 9
Established Member

Re: What do lenders consider a Subprime score?

Thanks. Both responses were very helpful. So just to reiterate: auto-enhanced scores are predominantly measured against installment loans.
Message 4 of 9
Frequent Contributor

Re: What do lenders consider a Subprime score?


@SEMO wrote:

Many lender's don't use just a standard rate sheet that has a designated rate based on score/vehicle year/term. Alot of captive lender's use internal scoring systems called scorecard's that look deeper than one's score. They focus on Ability/stability (PTI/DTI/job time/residence time) LTV, past credit history, and so on- rather than just the score.


I can verify this information based on the refinance earlier today of my two-year-old Chase auto loan. The loan officer asked me a lot of questions about how long I've owned my home, how long I've been at my current job, my household income, my current mortgage payment, etc. Chase definitely looks far beyond credit scores in making their auto lending decisions.

 

Message 5 of 9
Established Member

Re: What do lenders consider a Subprime score?

I've been at the same address for 17 years, clean 24 month mortgage history, 16 years at the same job, $10500 per month PTI, but I'm sure that doesn't really matter when they see a FICO auto score of 609. LOL!! Let's be honest, lenders are more concerned with three-digit number than anything else.
Message 6 of 9
Frequent Contributor

Re: What do lenders consider a Subprime score?

MR FAKO,

 

I am not arguing that your FICO doesn't matter in auto loan underwriting, however for many lender's it is just one input in the total equation. Your stability/ability and DTI will do wonder's in helping you get approved, but yes your FICO score will ultimately play a part.

 

I don't want my earlier response to misinterpreted, I am not saying to totally disregard your FICO scores, I am simply saying that many captive lender's are concerned with a multitude of variables rather than JUST your FICO scores.

AMEX BCE ($39,500) CITI AAdvantage ($20,500) Region's Platinum Card ($14,400) Discover IT ($23,000) Macy's ($7,000) Chase FU ($10,000) Barclay's Aviator ($22,000) TU:778 EX: 781 EQ:791
Message 7 of 9
Established Member

Re: What do lenders consider a Subprime score?

Well-said. I was supposed to trade up from an acura to audi ( or some may see that as a 'trade-down--lol); however, I think I'll wait another 6 months and allow my scores to season more.
I think residency, job stability, dti, and pti are all ok so maybe I'll be lucky.
Thanks.
Message 8 of 9
Frequent Contributor

Re: What do lenders consider a Subprime score?


@MR_FAKO wrote:
Well-said. I was supposed to trade up from an acura to audi ( or some may see that as a 'trade-down--lol); however, I think I'll wait another 6 months and allow my scores to season more.
I think residency, job stability, dti, and pti are all ok so maybe I'll be lucky.
Thanks.

Lucky?! As Pasteur said, "Chance favors the prepared mind."

 

It sounds as if you'll be fine as long as the combination of all those factors adds up. Just make sure to do your homework before you visit the dealership!

 

Message 9 of 9