We continue to be surprised by the fact that quite a few borrowers with damaged credit still don’t understand why the credit scores used by car dealers often aren’t the same as the one they think they have.
Finance managers have been known to present the product to problem credit buyers as “protecting an auto loan” which is actually a fairly accurate description. But the fact remains that credit-challenged borrowers, in particular, should have a basic understanding of how credit life insurance works.
Car shoppers that have experienced problem credit in some cases don’t take their overall financial situation into account before choosing a vehicle for a high risk auto loan.
Consumers with questionable credit should know that there is something in addition to an auto loan that could improve their FICO scores.
Consumers with problem credit thinking of applying for an auto loan need to first check their credit reports to be sure they meet the minimum in-bureau requirements of the majority of subprime lenders.
Borrowers that have experienced problem credit often have budgets and that are sensitive to the premium costs associated with auto insurance coverage required for car loans.