The Credit Score Car Dealers Really Use

© Sam Jordash / Getty Images

If you're a savvy auto loan shopper, you know to check your credit score before walking into the dealership. Knowing your credit score gives you a better idea of whether you'll get approved for an auto loan and the rate you'll likely qualify for. There's only one thing that could go wrong with that strategy. Your car salesman might be using a different credit score to approve your auto loan, one that you don't have access to.

Why Your Score is Different From the Auto Lender's

The credit score you access through providers like CreditKarma.com or even myFICO.com is a generic educational credit score, meant to give you an idea of where your credit score stands. When you apply for an auto loan, the lender will typically use a credit score that's tailored to predict the likelihood that you'll default on your auto loan. For example, FICO offers a FICO Auto Score that's specific to auto lenders and not sold directly to consumers. The FICO Auto Score uses a 250 to 900 range which means the auto lenders credit score could be much higher or lower than the score you check.

The information in your credit report changes often, which means your credit score can fluctuate from one day to the next. If there are a few days between the time you check your score and the lender checks your score, your credit score could be very different depending on how your credit report has changed.

Even though the score might be different, it's still based on the underlying information in your credit report. If your credit history is good, your credit score will reflect that, no matter which credit scoring model the lender uses to approve your loan application.

Other Industry Credit Scores

The auto score isn't the only industry-specific score FICO sells to businesses.

The company also sells a mortgage score, a medication adherence score, insurance risk score, a bankruptcy score, and even as score that tells how much revenue your account would generate. Lenders may use any of these scores to help decide whether to approve your loan application.

Should You Check Your Credit Anyway?

It's still a good idea to check your credit score before applying for an auto loan, even though you know it won't exactly match the score the lender will see. Checking your credit gives you a general idea of whether you have good or bad credit. If you have a low credit score, you might consider working to improve your credit before buying a car. This will give you a better chance at getting approved for a car loan with better terms.

It may be a good idea to check your credit report in addition to your credit score, especially if your credit score is lower than what you expected it to be. You can verify the information in your credit report is accurate and dispute any errors you find. Doing this before you go car shopping will help you get your credit in the best shape possible before you apply for an auto loan. Work on making sure the information in your credit report is positive so that no matter what credit score your auto lender uses, it will show that you have excellent credit.