5 Factors That Can Affect Bad Credit Auto Loans

If you’re trying to improve your credit rating, you may feel overwhelmed, frustrated, and even a bit exasperated with the whole process. At Joe’s Auto Sales, we help customers who have bad credit but also want to help them improve their credit scores. Keep reading to learn about five different factors that can negatively affect your credit.

1. Missing or Late Payments

If you don’t make consistent monthly payments, this could negatively affect your credit score. One or two late payments are not nearly as damaging as several late or missed payments over the course of the loan. If a lender sees this on your credit report, they’ll be less likely to finance a vehicle on your behalf.

2. Maxed Out Credit Cards

Try to avoid maxing out your credit cards. If you run your cards up to the maximum limit, this will adversely influence your credit score. If you find yourself in this predicament, make a plan to begin paying them down as soon as possible. As you pay them down, you should see your credit score begin to improve.

3. Closed Accounts

While it may seem counterintuitive, closing a credit account can negatively impact your credit. An open account that is not being used can actually improve your credit score. It’s seen as positive credit information. If you close it, it will eventually be removed from your credit report and can no longer have a positive influence on your credit rating.

4. Multiple Hard Inquiries

Each time you apply for a line of credit, you are adding a hard inquiry to your credit score. If you have too many of these, this can make you look unreliable as a borrower. Lenders tend to view multiple hard inquiries as high credit risks.

5. Past Due Settlements

Settling a past due account for less than what you owe can pay down your debt but it can also poorly affect your credit rating. Settled accounts prove that you were unable to pay your loan in full. Plus, the amount you were unable to pay will be reported as a deficiency to the credit bureau.

Improve Your Credit Score with Joe’s

Contact Joe’s Auto Sales today by calling our East Indianapolis location at (317) 405-8545. Improve your credit score by getting a bad credit auto loan from us. Finance your used car, used truck, used motorcycle, or used van and SUV.

Source: “5 Factors that Influence Your Bad Credit Car Loan.” Web article. Dan Cummins Auto Group. Web. 09 May. 2022.