No Credit? Want a Car? Consider a Ford | CommunityCars.com Blog
One of the biggest factors in getting approved for a car loan is your credit score. A low credit score can increase your interest rate and decrease the loan amount. Having a higher score deems you a lower risk in the eyes of a lender.
In today’s ever-growing world filled with technology and big data, car makers want to utilize the power of machine learning.
According to Ford, the company will incorporate ZestFinance machine learning to better predict risk and lower future credit losses. With machine learning, the hope is to broaden credit approvals.
In fact, credit scores as low as 600 may be less risky in the eye of Ford lenders!
How It Works
The machine learning platform works through artificial intelligence and data analysis. Over time, the platform can learn and make changes to risk variables and patterns. The process will take years to gather data, but car buying hopes are much brighter for some consumers.
The platform will use existing consumer data to help determine risk. New loan applications will be analyzed by the system according to existing data and variables.
No Credit? No Problem!
Have you gone looking for used cars for sale in Bloomington, Indiana, only to be turned away because of your credit score or history? You may have read all sorts of tips and tricks to increase your credit score. But, this takes time and if you need a car sooner rather than later, your options are quite limited.
With the use of machine learning, your days of getting denied for a loan may soon be part of the past. And you’ll be able to test drive used cars in Bloomington much sooner. The introduction of ZestFinance seeks to target those with a thin credit history.
According to CNBC, 45 million Americans have no credit history. Without a credit history, lenders have no basis for providing a loan. Lenders not only look at debt-to-income ratios, they also want to ensure that the consumer is at low risk of defaulting on the loan.
As today’s younger generations, such as millennials, seek to buy cars, many are turned away. A low credit score or little to no credit history are high-risk factors for lenders.
With the use of machine learning, Ford hopes to attract young customers who don't meet standard thresholds. The idea is to build brand loyalty by helping those consumers who will otherwise more likely be denied for a loan.
A Boost to the Car Industry
By approving more consumers without increasing lending risk, the auto buying industry may get the boost it needs. As sales have dropped in the last few years, car companies seek new ways to increase sales.
The introduction of ZestFinance benefits not only consumers, but the entire car industry. With Ford on board, the hope is that more car companies embrace technological advances to better position themselves.
Car Buying Made Easy
Looking to buy a car in Bedford, Indianapolis, Bloomington, or the surrounding communities? If so, Community Cars is here to make your search much easier. We offer a huge selection of used as well as new vehicles.
Give us a call at 888-340-0339 to find your dream car!
Sources
https://www.cnbc.com/2015/05/05/credit-invisible-26-million-have-no-credit-score.html