The company that created the FICO score has a second scoring model that may help bad credit car loan customers with a limited credit history.
Why a new score was needed
At AutoNet Financial we note that according to recent research done by Fair Isaac Corporation, nearly one-fourth of all adults in the U.S. either lack a credit report (no file), or have a credit report that contains too little information on which to compute a credit score (thin file). The reason behind this, according to the company, is because the credit bureaus add new information on a customer only when it is submitted to them by creditors and businesses. Since this process is entirely voluntary, many transactions can go unreported.
The Expansion Score
In order to better serve this group of consumers, Fair Isaac created what they call their “Expansion Score”. In order to accomplish this, the company actually established two brand new subsidiaries. The first collects information from such non-traditional sources as payday lenders, rent-to-own stores and pawn shops. This unit also regularly seeks out new credit sources in order to provide additional data for the scoring system. The second company then assembles the provided information into credit files so that it can be analyzed and translated into the same credit scoring range as the traditional FICO score.
The new score and bad credit car loans
For those bad credit car loan customers that, in the past, had been trying to buy a car using a subprime lender and were turned down because of no credit history (a credit “ghost”) or an incomplete or limited credit history, it might be time to give it another try – especially if they have a good payment history with payday loans or a business like Rent-a-Center.
This new report enables bad credit car lenders to view a more complete credit file and, in most cases, view an actual credit score on many more applicants than it was able to in the past. It also means that if you have done business with rent-to-own stores and payday lenders, there is a good chance that information will now appear in your credit report.
At AutoNet Financial we can help
If you were turned down for credit more than a year ago because of a missing or incomplete credit file, the new scoring system may make a difference. According to Fair Isaac, the new program could add an additional 50 million consumers to their database.
Here at AutoNet Financial, we have helped thousands of customers with bad credit, through our dealer affiliates, purchase a new or quality, low mileage used car and, at the same time, rebuild their credit. Our web site, www.autonetfinancial.com, contains information that can help you establish a budget and estimate a car payment. It also contains an online resource center where you can get answers to many of your questions. At AutoNet Financial, we want to help you get “on the road” to better credit.
