Why Credit Score is Lowered, explains Auto Relief Group
Why Credit Score is Lowered, explains Auto Relief Group
There are numerous circumstances where people are not approved for auto loans because they had a low or bad credit score. Borrowers with low or bad credit score are generally considered to be borrowers with high degree of risk involved. Lenders are reluctant to lend to these individuals fearing that their loan amount may not be returned.
Even if some lenders are ready to provide loans to borrowers with low or bad credit score they will charge very high interest rate on the loan amount. In all cases the individual with low or bad credit score is the one who suffers and bears the brunt of defaults in loan payments. Usually a credit score below 640 is categorized into low or bad credit score.
This occurs when you have constantly defaulted on your monthly loan payments, bankruptcy, repossession of your vehicle, or even small mistake of not paying your traffic penalties. The last point is very interesting. One would wonder how does, not paying traffic penalties affect the credit score.
The authority which issued the penalty for violating traffic rules wants it money and will take steps to collect the fine amount. If the person doesn't pay, the authority may seek help from the collections firm to collect the fine amount. And once these reports go to credit reporting companies it will impact that particular individuals credit score.
Having a low or bad credit score doesn't mean that a person is completely ineligible to qualify for an auto loan. There are possibilities that some lenders will approve you; the only difficulty you will face is that of getting a loan amount with lower interest rate. It is advisable that instead of suffering from low credit scores, people should improve their credit scores before it's too late.
Auto loan modification can be used to improve your credit score. Auto loan modification companies help negotiate your auto loan with lenders to lower the interest rate and reduce your monthly car payments. It does improve your credit score if you regularly pay your monthly payments in the specified time period for the loan.
About Auto Relief Group
Auto Relief Group offers Car Loan Modification service, we assist car owners in renegotiating their car loan or lease, avoid repossession and maintain ownership of their vehicle by working directly with lenders to restructure loans, extend terms or reduce payments.
We provide our clients with customized reports, expert advice and negotiation assistance when restructuring their car loans.
Website : http://www.autoreliefgroup.com
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