What is Auto Bad Credit?

Auto bad credit – you hear the term and you know it’s not good… but still confused about what it means? Do you think you have a credit problem and is this stopping you from securing what is called a bad credit car loan? Let’s clear the confusion…

When you miss a payment, be it a credit card payment or a loan payment, this is ‘logged’ and people keep track of this. When applying for an automobile loan, banks, lenders and credit unions will ask for your credit rating, which is basically a means to evaluate your capacity to pay. So, if you have a bad credit rating, you are considered a ‘high risk’. Nowadays, you can still avail of automobile loans but the lenders will apply a high interest rate on these loans.

What Is Good? What Is Bad?

Fair Isaac Corp. developed the scale by which a credit score is determined and if you have a credit score of less than 650 (out of 850) you are considered a high risk already. If this is the case, then at least you know what your credit score is and you can start looking for lenders that offer bad credit automobile loans. This will at least save you time, narrow your research for the type of automobile you are looking for and help you prepare for the payment schemes that will likely be offered to you.

Written by: Kathy Marion

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