Do dealers look at Equifax or TransUnion?

Do Dealers Look at Equifax or TransUnion?

When applying for an auto loan, potential borrowers often wonder which credit bureau’s information will be used to determine their approval and interest rate. While auto lenders may consider credit scores from multiple bureaus, there are two primary factors that influence their decision.

Credit Scoring Models

Auto lenders typically consider credit scores generated by two prominent models:

• FICO® Auto Score: Developed by Fair Isaac Corporation (FICO), this score is specifically designed for auto lending. It incorporates factors such as payment history, amounts owed, length of credit history, new credit inquiries, and types of credit used.
• Vantage: Developed by the three major credit bureaus, Vantage is another scoring model that is commonly used for auto loans. It considers similar factors to FICO Auto Score, but it may weigh them differently.

Credit Bureau Reporting

Once a lender requests a credit report, the consumer’s credit information is obtained from the three major credit bureaus: Experian, TransUnion, and Equifax. However, lenders may prioritize scores based on the bureau that provides the highest or most stable score.

Which Bureau Do Dealers Look At?

The answer to whether dealers look at Equifax or TransUnion depends on the lender’s preference. Some lenders may:

• Use the same bureau nationwide: Certain lenders nationwide may consistently rely on one bureau, such as TransUnion.
• Rotate bureaus based on location: If a borrower applies for a loan at multiple dealerships, the lender may rotate bureaus based on the dealership’s location to ensure consistency.
• Use a combination of bureaus: To get a more comprehensive view of the borrower’s credit history, lenders may request reports from all three bureaus and use the highest or average score among them.

Impact on Approval and Interest Rates

The credit bureau that a dealer chooses to use can have an impact on the borrower’s chances of approval and interest rates. If a borrower has a higher score with one bureau than another, the lender may be more likely to approve their loan and offer a lower interest rate.

Conclusion

Ultimately, whether dealers look at Equifax or TransUnion depends on the lender’s specific policies and practices. Borrowers can improve their chances of obtaining a favorable auto loan by maintaining a strong credit history with all three major credit bureaus.