Toyota Financial Services: Your Credit

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Your Credit

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Your personal credit rating is a self-assessment of your spending and billing habits and your overall debt load. Your past credit activity affects the financing terms you will receive from a dealership

Rate Your Credit

Here's a guide to help determine your credit rating:

Rating	Description

Excellent	I have a long, established, positive credit history. FICO score 720 and above.
Great	I use my credit wisely and never miss a payment. FICO score 690-719.
Very Good	I have a positive credit history with no recent late payments. FICO score 670-689.
Good	I am responsible with my credit and usually make my payments on time. FICO score 650-669.
Fair	I try to be responsible with my credit but have had some recent credit challenges. FICO score 630-649.
Poor	I have a number of issues with my credit. FICO score 610-629.
Very Poor	I have significant credit issues or have only very recently established credit. FICO score 580-609.
Extremely Poor	I have an extremely poor credit history or I have no credit history at all. FICO score 579 and below.

Based on your answers, our Payment Estimator can provide you with an estimate of the terms you may receive through the dealership. However, these estimates are provided for illustrative purposes only, are all based on averages, and they can at best only give you a ballpark figure. Many variables, including current market rates, your credit history, and down payment will affect your final terms. So while you'll have a good idea of how much you'll be paying, keep in mind as you enter the dealership that it's not the final word on your credit. Your Toyota dealer can help you figure out a plan that's right for you. Your terms will be agreed upon by you and your dealer.

If you didn't rate very high on our credit test, don't give up just yet. The benefit to financing or leasing a Toyota through your dealer and Toyota Financial Services is that we understand that not everyone's credit history is perfect. We've designed specific programs for qualified applicants with little or no credit experience. Check out our finance and lease programs for more details. These programs are available through your Toyota dealer and TFS.

Credit History

When you apply to finance or lease a Toyota at the dealership, the dealer will take a look at your credit history.

Your credit history is reflected in two important resources available to creditors, a Credit Report and Credit Score.

Credit Report

Your credit report helps creditors decide if they want to extend credit to you. It includes:

Personal information: Your name, current and previous addresses, Social Security number, date of birth, telephone number and current and previous employers.
Credit information: Your creditors and account details such as date opened, account number, amount borrowed, payment terms, credit limits, account balances and payment history.
Public records: Tax liens, bankruptcies and court-awarded judgments.
Inquiries: A listing of all parties that have requested a copy of your credit report. This includes formal inquiries (a list of all creditors who have accessed your credit report), promotional inquiries (this is where all those pre-approved offers come from) and account management inquiries by your current creditors (they have the right to review your credit report periodically). Promotional and account management inquiries are not shown to other creditors but are shown to you and do not impact your credit score.

How is Your Credit Report Generated?

Each of the three major credit-reporting agencies (or credit bureaus) keeps a running tab on your credit history, based on the information it receives from creditors and public records, among other sources. When you apply for credit, creditors will request a copy of your report from one or more of these bureaus.

The contents of your credit report may be used to compute your Credit Score.

Credit Score

Your credit score can be your best friend or your nemesis. Your goal is to maintain a good credit score, as these scores are used by creditors when they're deciding whether or not to extend credit to you.

The most commonly used credit scores generated by the credit bureaus are often referred to as "FICO® scores", even though each of the three major credit bureaus has its own name for these scores. FICO® stands for Fair Isaac and Company, the company that produces the software used by many credit bureaus to calculate your credit score. These scores range from 300–850, the higher, the better.

Over the years, this three-digit scoring system emerged as a way to compare how the information on your credit report compares with each bureau's credit history on hundreds of thousands of other consumers.

Basically, your credit score suggests to creditors how likely you are to repay your debt.

Because your credit score is such an important aspect of obtaining an extension of credit, multiple factors are used to compute your credit score:

Past payment history – Have you paid your credit accounts on time?
Amounts owed – How much credit you have available vs. how much you owe
Length of credit history - How long have you had your credit accounts?
New credit and credit inquiries - Have you recently taken on more debt?
Types of credit established - May include credit cards, home mortgages, and car loans

Not Just One Score

The truth is, there is no one score. Every bureau has its own scores for different purposes and each bureau uses its own method of calculating your credit score based on the criteria listed above.

Additionally, it's quite probable that at any given time, each credit bureau will report a different credit score for you. They all attempt to remain as current as possible, but the resulting score is only as accurate as the information that they have available. This is why you should check your credit scores from time to time.

Creditors may use the scores they obtain from the bureaus in their own formulas to determine a credit score of their own. While we can't identify the factors used by every creditor in identifying your credit score, it's safe to assume that these formulas incorporate your credit bureau score as it fluctuates from time to time. Fluctuations can be used as a guide to understanding your financial behavior (how likely you are to repay a debt).

Always Changing

It's a tough job trying to keep track of everyone's credit. While the credit bureaus try to stay on top of your credit history, sometimes things are missed and the different bureaus may maintain different data of you. Therefore, your score from any given credit bureau is a reflection of the most recent information they have on you, so it's possible for your credit score to change by the day. Here's where you come in.

To remain in good credit standing, you must take a proactive approach to guard your credit history. We outline the various ways to do this in Credit Tips .

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