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Will the car loan overdue for two days affect the credit report?
The answer is: Yes.
The car loan will be recorded in the credit information system by the bank for two days after it is overdue, which will affect the personal credit score.
A car loan is a type of consumer loan, which is a type of personal credit loan. Personal credit loan refers to a loan issued directly by a bank to an individual based on the individual's credit status without requiring collateral or guarantee.
Personal lines of credit are usually repaid in equal monthly principal and interest payments, i.e. a fixed amount of principal and interest is repaid each month.
The repayment period of a car loan is generally 3-5 years, and the repayment date of each month is usually the day after the loan disbursement date. If you do not repay the principal and interest of the month on time on the repayment date, you will be overdue.
The definition of overdue refers to a situation where a loan is not repaid or repaid in full. The number of days overdue refers to the calculation from the day after the repayment date until the principal and interest of the current month are repaid.
According to the Business Specifications for the Basic Personal Credit Information Database, banks will submit the personal credit loan information of the previous month to the basic personal credit information database of the central bank on the fifth working day of each month. This information includes loan origination, change, settlement, overdue and so on.
In other words, if you do not repay the principal and interest of the current month on the repayment date of January 10, then on January 15, the bank will report your overdue information to the central bank. The basic personal credit information database of the central bank is what we often call the credit information system, which is an authoritative institution that records and reflects the credit status of individuals.
Therefore, it is inevitable that the car loan will be recorded in the credit system by the bank for two days overdue. Whether it's because you forget to repay, or because of difficult cash turnover, or because of other reasons, as long as your car loan is overdue, you will be left with a bad credit history.
Personal credit information in the credit reporting system will be used to calculate personal credit scores. Personal credit score is a number that reflects the credit status of an individual, which is comprehensively evaluated by the credit information system based on the individual's credit history, credit behavior, credit ability and other factors.
Personal credit scores range from 300-900 points, with higher scores indicating better credit status and lower scores indicating worse credit status.
There are several reasons why a car loan is overdue for two days and can affect a person's credit score:
1. Overdue records will reduce credit ratings
Credit ratings are divided into five levels based on an individual's credit score, which are AAA, AA, A, B, and C. A higher credit rating indicates a better credit profile, and a lower credit rating indicates a worse credit profile. If the car loan is overdue for two days, it will be considered a bad credit behavior, which will lead to a decrease in the credit score, which will affect the credit rating.
Generally speaking, for every step down in the credit rating, the credit score drops by 30-50 points.
For example, if your credit score was originally 750 and is AA, your credit score may drop to 700 and be downgraded to A two days after your car loan is overdue.
2. Overdue records will affect subsequent loan applications
Personal credit information in the credit reporting system will be queried and used by other financial institutions. When you apply for other loans in the future, such as mortgages, credit cards, etc., financial institutions will judge your ability and willingness to repay based on your credit score and credit history.
If you have a record of overdue car loans in your credit system, the financial institution will consider you to be a customer with a higher credit risk and will reject the loan application, or give you a higher loan interest rate, or reduce the loan amount.
3. Overdue records will increase the cost of repayment
A car loan that is two days past due will not only affect your credit score, but will also put an additional burden on your repayments.
According to the car loan contract, if the repayment is overdue, the bank will charge you late penalty interest and late fees.
Overdue penalty interest refers to the interest calculated according to the overdue amount and the number of overdue days, according to the interest rate agreed in the contract.
Late fees refer to the fees calculated according to the overdue amount and the number of overdue days, according to the fixed amount or proportion agreed in the contract. These fees can increase your repayment pressure and also affect your liquidity.
To sum up, a car loan that is overdue for two days will affect a person's credit score, which is a problem that cannot be ignored. If you don't want your credit to be damaged, you should try to avoid overdue car loans.