Credit Tier

Category: finance

A grouping assigned by the dealership or lender based on the buyer’s FICO score, determining their eligible interest rate.

Dealers typically utilize a tiered system: Tier 1 (740+ FICO) gets the best "subvented" factory rates, while lower tiers (Tier 4 or 5) carry significantly higher interest rates to compensate for the higher default risk profile. Your credit tier is the primary lever in your loan cost.

Common Examples

• My high FICO score qualified me for the top credit tier, unlocking the manufacturer’s promotional 1.9% financing deal.
• The F&I manager informed us that our score placed us in credit tier three, which carried a four-point increase in the base annual interest rate.