What Is A Tier Two Automotive Credit Rating

Auto dealers use their own credit scores to determine financing rates.

In purchasing a new or used car, credit counts. While most people realize this, what they don’t know is that a regular FICO score is not the only criteria auto dealers use. In fact, many auto dealers do not use standard credit scores at all, but rather a proprietary credit score which divides prospective buyers into tiers. A tier two automotive credit rating will affect the rate of financing available to a car buyer.

What Are Auto Credit Scores?

Auto credit scores are generated in a similar fashion to regular credit scores. The difference is that auto credit scores consider criteria related to prior auto purchase and leasing, in addition to a regular credit history. This means it is possible for someone to have a very high regular credit rating, but a much lower or even no auto credit score if he has never purchased or leased a car in the past.

Criteria for Auto Credit Scores

Auto credit scores are based on a number of criteria: income, past auto purchase and payment history and overall credit history. Important considerations include the amount of car payment as a percentage of overall income and total debt to income ratio. Residence stability also plays an important part in determining auto credit scores.

Tier Two Auto Credit

Different auto dealers have different names for tier two credit: 2 Tier Credit (Ford Motor Credit); B Tier (GMAC Financial); Gold Tier or Tier 2 Credit. This tier roughly corresponds with a FICO score of 600 to 699. Slow payment (especially on auto loans), too many recent credit inquiries and small collections are the criteria which divide tier two credit from the top tier credit.

Leveraging Tier Two Credit

One way to obtain more favorable lending rates with tier two credit is to obtain your regular credit reports, and take them with you to the dealer. Allow the dealer to report the credit scores she has received for you, and if they are higher than the scores you have, allow her to use those scores to determine your financing. If they are lower, offer the scores you have obtained and ask her to consider those instead.


Auto credit ratings are not available to the consumer at any price. However, some auto dealers only use regular FICO scores. If your regular FICO score is high, you can finance a car with a dealer that uses them, and maintain good payment practices to increase your auto credit rating.