Purchasing a vehicle is, typically, the second largest purchase that people will make behind buying a home. Because this is such a major purchase, when people apply for an auto loan, they will be asked to undergo a credit check as they are when they apply for their home mortgages. What these lenders find in these credit reports will determine how much the loan will cost these applicants, or it may persuade these lenders not to loan money to these people at all.

One of the best barometers of how good of a risk someone is for repaying a loan is the credit score, because a credit score is related to how well people manage their money. A low credit score, one that is below 650, may be this low because these people have been in the habit of paying their bills late. The one recourse people have when their customers don’t pay their bills is the ability to report this fact to the credit bureaus, which makes their credit scores go down.

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