» » » » How FICO Score 9 Credit Determinations Affect Consumers

People's negative credit scores can haunt them, but the FICO Score 9 changes may make this situation better in a lot of ways.

Unfortunately, unpaid medical and auto bills lead to a poor credit score, and make it difficult to secure a loan. FICO Score 9 changes were specifically designed to give some measure of relief to people in a tough financial situation. Lenders also stand to benefit from the changes, as they stand to make more money through lending. A nation consumed by debt isn’t profitable to lenders, and FICO Score 9 changes aren’t going to solve the debt issue; however, these changes do offer more opportunities to people with poor credit scores.  

FICO Changes Are Not Universal

FICO Score 9 updates will not be recognized by all banks and dealers. FICO has always been an independent company, and as such it’s not mandated that lenders have to consider their scores. If federal standards mandated that all lenders consider FICO scoring, then millions of Americans would automatically benefit.

FICO Changes and Auto Loans

When it comes to auto loans, people with bad scores may have more opportunities thanks to the FICO changes. Some lenders have already adopted these changes, and it’s perfectly acceptable to ask a potential lender if they consider FICO Score 9 changes before applying.  

Credit Determinations Affect Consumers

When it comes to auto loans, borrowers should remember that secondary or indirect lending is an option. Under these circumstances, customers will still purchase their cars through the dealers, but they will make their regular auto payments to a bank. In that regard, indirect lending is similar to a more conventional auto loan.

Consumer Portfolio Services is a very real option for people who are looking for indirect automobile financing, especially if they are still living with credit history problems. The FICO changes won't help everyone, but there are plenty of companies that can help balance the situation.

On their Facebook page, CPS Inc. writes that they are “an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories.” The company purchases retail installment sales contracts for new and used vehicles, and then funds those purchased through long-term contracts. For people with poor credit scores, this could mean the difference between driving a car and taking the bus to work.

Loans for New and Used Cars

Indirect lending is a good option for people who want to get new cars. If you’re able to get direct or indirect auto loans from a service that has accepted the FICO Score 9 changes, borrowers may finally have the opportunity to get the cars that they've wanted for a long time.

People in this situation should also consider taking advantage of vehicle remarketing, which involves used cars. Time Magazine reports that “The number of off-lease used cars for sale is expected to jump to 2.5 million” in 2015. Greater inventory means more opportunities to save big on the car you want.

Used cars are going to be significantly less expensive than new cars in almost all cases. There are specific loans for used cars, which may or may not make more sense financially for certain customers. The new FICO Score 9 changes may give borrowers more options, so they should weigh the pros 
and cons of purchasing older cars or newer cars.

People who are looking for auto financing have plenty of options. They can get new cars or used cars depending upon what works for them. The FICO Score 9 changes will help some people, but even without the changes you (who are living with credit history problems) may still have opportunities for lending.

About Denny Jones

Hi there! I am Denny, a personal finance blogger and I love to share tips related to managing finance for a better living. Follow my blog for lots of fresh and exciting tactics to control your finances.
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