Based on 10-month data on car buyers ending October 2008, the average FICO score of consumers approved for a loan or lease increased 28 points (from 679 to 707) compared to the year-ago period, reported CNW Market Research.

The Bandon, Ore.-based market research firm said the higher score reflects automakers practice of reducing the number of loans they distribute to each credit score tier and minimizing the risk to their portfolios.

In addition, the research firm found that for budget and economy car buyers, the necessary credit score increased from the low 600s to the middle and upper-middle 600s, a 7 to 8 percent increase from 2007.

The reduction in loan distribution across all credit tiers was reflected in new-vehicle loan approval rates, which dropped in the prime, near prime and subprime categories in October 2008, compared to the year-ago period. Prime approval rates were 77.4 percent vs. 91.1 percent in 2007. Near prime approval rates were 73.7 percent vs. 84.8 percent a year ago. Subprime approval rates plummeted to 14.3 percent, compared to 64.1 percent in 2007.

The reduction in loan approval and distribution will also help maximize the resale value of off-lease cars and trucks by limiting the amount of reconditioning work needed before auction. CNW also found that leased vehicles, when categorized by FICO score, showed higher rates of wear and tear, and repair costs among lessees with lower credit scores.

In 2008, 12 percent of leased vehicles among lessees with credit scores between 650 and 700 had an average of $451 worth of damage at the end of term. Meanwhile, 3.7 percent of leased vehicles among lessees with higher credit scores had less than $300 worth of wear and tear damage.