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Loan Repayment: Is Your Credit Score a Good Predictor of Ability?

Cartoon of a person climbing Credit Report check boxes of "excellent", "very good", and "good"

Many consumers in the US experience hardship beyond their control, affecting loan repayment. This may be due to an auto accident, an illness, or a family member falling ill and needing care, sometimes even requiring a son or daughter to move across the country to be close. You may have gone through a difficult divorce, losing much that you had built both emotionally and financially over the years. Such duress is often accompanied by difficulty in paying the bills, to include credit cards, the mortgage, and the car loan.

While your credit may have been beaten up for a short time, this should not define you for good; however, it can be very hard to repair a credit score that plummeted in bad times. It can also be difficult, in most cases, to convince lenders that you are still a good risk. You may feel like you are being judged because of a credit score that reflects difficulties of the past—not your successes of today.

Auto Lenders May Put Too Much Emphasis on the Credit Report

If you have gone through a rough time financially, chances are you aren’t out there right now looking to buy another fancy house. The need for a new (or new used) car can arise at any time though due to an accident, age of your vehicle and required repairs, or more. This can be a major cause of stress if you don’t have cash saved up for such an expense. You may be at the mercy of lenders who seem to live and die by the, yes, you guessed it: credit report. And you may be penalized when compared to other borrowers out there with better credit who are figuring out even more ways to raise their scores further.

Many Consumers Have Learned How to Boost or ‘Game’ Their Scores

Your score may not be the true indicator of whether or not you will actually pay back your auto loan, and as Bloomberg reported recently, some consumers may be so good at manipulating their credit scores that the numbers are becoming meaningless. Many consumers today are gaming their credit scores with a variety of hacks, generally only available to those who have pretty good credit already. We’ve covered the technique of paying to delete bad information on your credit score—again, making it obvious that with all the manipulations and information consumers have at their fingertips regarding cleaning up their credit reports with little outside help, the numbers may begin to mean less and less. This would be good news for consumers who have been branded as poor risks due to issues they had years ago.

“Everything but credit scores have been eased in lender underwriting,” says Matthew Mish, UBS strategist. “Loan terms are stretched out, interest rates are aggressive, but there may be an over-reliance on credit scores, and that’s the danger.”

So Many Other Details Demonstrate Your Financial Picture

Many lenders do take other facets of your financial picture into consideration; in fact, you may feel like they know you inside and out by the time you are done applying for an auto loan, with the credit report only acting as one part of the deciding factor. Your employment history, income, family support obligations, investments, retirement funds socked away, and more will help them understand more about the risk—or lack thereof—that you pose as a borrower.

“Simply put, the common comparison of credit scores over time is not a robust measure of risk trends,” state UBS strategists.

Cartoon of a person climbing Credit Report check boxes of "excellent", "very good", and "good"

Contact Us if You Need a Debt Settlement Plan

While some consumers today may be making a hobby out of seeing their credit scores rise, many others are still trying to get a true handle on debt accrued during difficult times. This can often be managed by negotiating with creditors or lenders, or in working with an experienced law firm like Fitzgerald & Campbell, APLC that can create a specialized debt settlement plan to make your life much better. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations. Let us review your case and discuss what would work best for you. We are here to help!

Call us today for a free consultation at (844) 431-3851, or email us at

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