Re: What credit score are finance companies looking for?
Score is more important to larger lending institutions. Try a credit union, or small bank, they are able to use common sense more often than large lenders. I have done loans with credit scores in the 500 range, and our policy is to grant same terms to low, as high credit scores. Depending on the credit, a low score is not always bad. The credit rating system looks at a miriad of items to come up with a score. It is however a computer, does not understand reason, objective not subjective. As an example, a 19 year old can have a credit score in the 700's merely because they have had a small limit credit card for a year and a half or so with no late payments. This shows the computer this is a good risk. Common sense would tell you this is no real pattern, or sufficient debt load to establish risk. On the other hand, you may have a person in their 40's who has had perfect credit for 10 years. For whatever reason, they obtain a collection, normally medical in nature, as medical institutions go straight to collection agents rather than try to collect. There is often confusion of whether the patient should pay, or the insurance should pay. Meanwhile a collection appears, and voila', lowered score. Combine this with a recent late on a credit card that was overlooked, and paid late. These two events in combination will really hurt even a very high score. In this scenario, the computer says, oh my, this is a high risk, when in reality it is a no-brainer approval. Even with marginal, realistically bad credit, there are ways to bypass the turn-down due to the same. Large down payments, relationship with your lender, safe risk collateral such as homes (pretty safe anyway, more likely to increase in value than decrease). Anyway, moral of my story, stick to the small guys, hope for common sense, and always respect your credit.
