There are many types of credit scores.  Most people are familiar with FICO’s credit score, mainly used for mortgages and refinancing home loans or home equity lines of credit.   However, there are many other types.  For example, there are alternative credit scores for auto loans, insurance and even to determine employment status.  All the scores are based on your credit report information, but are just calculated in different ways.

The auto score is a very popular alternative to the standard credit score and it is important consumers understand who can look at it.

The auto lending industry uses a specialized auto score, usually from FICO.  It’s called the Auto Industry Option Score.  Approximately 90% of auto loans use this auto score instead of the more familiar credit score.  The auto score judges your credit risk more heavily weighted to your prior auto loan or lease payment history.

Who can look at your auto score:  auto lenders, auto dealers and you.  Your permission is required, in the form of a signed credit application, for an auto dealer or lender to view your auto score.

You can view your auto score by becoming a member of SmartCredit.com Whenever you update your credit report, all your credit scores are updated as well, including your auto score.

Be sure you understand there is a difference between your credit score and your auto score.  Confusion often is to the advantage of the auto dealer.

Click here for more information on this Auto Scores >>

What can you do?

Be proactive by using SmartCredit.com and ensure all your scores are the best they can be.  Smart Credit’s patent-pending Action buttons communicate directly with your creditors for anything you need, including improving your auto and credit scores.

Its simple.  Just use Smart Credit’s innovative credit report and click on action buttons to talk directly with your creditors to get better interest rates or ask your creditor anything.  No need for phone calls, writing letters or looking up account numbers.  You can fix credit report errors, get goodwill corrections, recover from identity theft, replace a lost or stolen credit card or settle a debt all directly with their creditors.  It’s fast and effective!

Always Active Complete Protection gives Smart Credit members the most complete credit monitoring and identity protection available.  Having only one or the other is not enough.  It also includes our Mobile Rapid Response action button in alerts for the fastest way to stop identity theft.

David B. Coulter – Founder and C.E.O. of SmartCredit.com

The insurance industry uses your credit report to generate a unique score for their insurance underwriting and claim management. This is called an Insurance Score.

Many auto and mortgage insurance companies look at your credit report, in part, to determine if you are qualified for their lowest pricing plans.

They also look closely at recent financial stress that may hint at possible fraud.  Meaning if you’re maxed out on your credit, you might be tempted to make a false insurance claim.

It is also common that insurance companies will review a policy holder’s credit report to look for sudden financial stress which may spur them to investigate any damage, theft or lost item claim as possible fraud.

If you apply for life insurance over $150,000; your credit report will generally be checked as a matter of procedure.

Depending upon applicable state laws your credit report can even be used to deny you insurance.

Many people believe this practice is troubling.  Especially considering credit reports may have errors and identity theft is the number one complaint to the Federal Trade Commission.  In fact, a growing list of States prohibit the use of your credit report for determining insurance rates.

Smart Credit developed an insurance score that considers many factors insurance companies use to determine rates and possible fraud.  Our insurance score range is between 350 and 850 and this chart will show you how insurance companies may rate you:

SmartCredit.com includes this insurance score at no additional charge.  It’s a great way for you to track how insurance companies may judge your credit for your insurance rates or claims.

How to best prepare for an insurance application and get the best possible rates?

Be proactive!  Make sure your credit report is the best it should be before you apply for insurance.  Use SmartCredit.com to fix errors, get goodwill corrections and settle out debts.  It’s fast and easy with our Smart Action buttons.

David B. Coulter – founder and C.E.O. of Smart Credit

When buying a car most people don’t know their credit score is not used to determine their car loan.  Instead, a different score is used.  It’s something called an Auto Industry Option Score (‘Auto Score’).  This auto score is usually calculated by FICO exclusively for use by auto lenders to determine your loan qualification, down payment and interest rate.

Almost 90% of auto lenders base their lending decision on your auto score. It is calculated primarily on your previous auto loan history and not your overall credit as would normally be the case for a mortgage or credit card.  You would be surprised how many people can get a car loan and not a credit card.

Many lenders are willing to give out auto loans to those with less desirable credit scores. This is because studies have shown people with poor credit histories will generally keep their auto loan payments in pretty good shape all the while letting their other credit go unattended in one way or another.  This is another reason why they need an auto score to better guide their lending decision.

Because lenders are more likely to use your auto score, instead of your credit score, getting an auto loan can be a great way to build or restore your credit. Make those payments on time and begin to build up a positive credit history.

Know your auto score.  SmartCredit.com includes our auto score at no additional charge.  It is heavily weighted on the following credit report factors, which FICO also uses in their auto score:

- An auto loan or lease sent to collections

- Any late payments on an auto loan or lease

- An auto loan or lease settled for less than owed

- A repossession by the lender

- Previous two year overall credit

Smart Credit’s auto score range is between 350 and 850:

How to best prepare for an auto loan application?

Make sure your credit report is the best it should be before you apply for an auto loan.  Use Smart Credit to fix errors, get good will corrections and settle out debts.  It’s fast and easy with our action buttons.

Being proactive with your credit will not only improve your credit score, but will have a positive impact on your auto score as well.  Especially, if you take these actions on your current or past auto loans.

David B. Coulter – founder and C.E.O. of Smart Credit