FICO announced last week its newest FICO scores targeted specifically to the auto lending and bankcard industries. TransUnion is the first credit reporting agency to offer the new scores and make them available to lenders and issuers.
The new FICO score for auto loans is called the FICO Risk Score, Classic Auto 08. FICO said in a news release that the new score was needed to address auto industry challenges.
How does the new FICO score predict possible auto loan delinquencies? According to FICO, the new auto score will provide auto lenders refined risk performance classification, enhanced segmentation capabilities and protection against authorized user account piggybacking, while supporting compliance with federal fair lending and credit reporting regulations.
What this means to you, the consumer, is that car loan lenders will be better able to predict if you’ll be delinquent on your auto loan payments. This may be bad for you if you’ve missed a car loan payment in the past or if you’ve ever paid late. Lenders may view you as more of a risk.