Bad Credit Car Loans in London Ontario: How To Calculate My Credit Score?

You must have already known that your credit history plays a vital role if you are looking to apply for bad credit car loans in London Ontario. Buying a new or used car is always a costly venture, and you may need financing for it. But loan approvals mostly depend on your credit history. If you lack creditworthiness, you must start looking for bad credit auto loans.

 

Everything has its pros and cons. The same is the case with bad credit loans, and you will most probably get unfavorable terms and conditions. Furthermore, you will also have to be cautious of scammers and lenders who prey on people with bad credit. This article will discuss the key details you must consider while financing your car.

 

Understanding Bad Credit Car Loans in London, Ontario

 

Two main credit bureaus review and analyze your credit score in Canada, naming Equifax and Transunion. According to Equifax, the credit scores range between 300 and 900. Your credit score is only a fraction of the factors that a lender analyzes while reviewing your application. Other factors include debt-to-income (DTI) ratios, monthly income, etc.

 

A credit score under 560 is considered poor, while anything above 760 is excellent. Credit scores between 560 and 660 are on the lower limit, and the approval depends on the lender. It is always a secure option to have a credit score over 660. These calculations are from Equifax bureaus. The following factors calculate the credit score.

 

Payment History

Your payment history determines 35% of your credit score. It is calculated based on payments on debts, collections accounts, judgments, and other payment-related reports.

 

Credit Utilization Ratio

The credit utilization ratio is the amount of credit you have used versus your available credit. It contributes to 30% of your overall credit score. This factor analyzes the amount of credit you have used to the available credit limit. The ideal Credit Utilization Ratio is 30%.

 

Credit History Length

The length of your credit history accounts for 15% of your credit score. It is the measure of time you have been using your available credit. The longer the time, the higher will be your credit score.

 

Public Records

Your public records also define your credit score. The lender also looks into the public details and analyzes your performance. Major issues like bankruptcy, tax payments and other details are considered. A bad public record may negatively affect your credit score.

 

Credit Inquiries

Lenders normally look into your credit card and other forms of credit when you apply for a loan. These inquiries contribute around 10% to your score. Inquiries are a casual part of the process, and these do not matter much. But having too many inquiries may lower your score.

 

 

Auto Approvers provides the best bad credit car loans in London, Ontario. Contact our representative today and get your car loan approved.