The auto industry is moving to adopt the FICO 8 Auto Score, with a majority of the top 35 lenders already moved or planning to move to the scoring system by May, FICO recently announced.
Additionally, nearly 18,000 franchised dealers and most of the more than 30,000 independent dealers who use credit scores are also expected to integrate the FICO tool, according to a news release. Industry-wide adoption of the auto score will help lenders and dealers share information and grant credit to consumers with more confidence, the company said.
Dr. Mark Greene, FICO's chief executive officer, said the tool would contribute to lenders' growth and reduce risk. "FICO knows well that the credit quality of the automotive consumer has changed over the last couple years," Greene said. "While there is cautious optimism around growth opportunities for the auto market in 2011, FICO realizes that sharper risk prediction tools are critical to our clients’ long-term profitable growth."
Banks and automakers' lending arms are increasing the loans they grant to consumers, The New York Times reports, after drastically cutting auto loan approval during the financial crisis. Now, even consumers with less-than-pristine credit have been able to secure loans, driving up the sale of new and used cars, the paper reports.