Credit scores, which are generated on credit reports, can have a substantial impact on a person's future ability to get loans or mortgages. As such, the process of getting an auto loan or home mortgage can be complicated; if not impossible in some cases. Financial challenges can also lead to repossession of assets or bankruptcy.
According to Credit Karma, a provider of a web-based credit monitoring service, the average credit score among consumers in Alabama is decreasing. The average credit score was 628 amongst Alabama consumers, which overall is nine points lower over 2012 and one point lower than last month. Even though the average credit card debt, auto loan debt and student loan debt is lower than other states, these numbers may only be proportional to the lower average income in Alabama. However, Credit Karma stresses the low credit score is an area of main concern that must result in education and help to resolve.
Repossession of assets, such as automobiles, may be necessary when there are multiple late or missed payments. This can happen without notice in order to satisfy the remaining debt owed on the vehicle. Even though these laws will vary from state to state, the lender often does not need a court order to take such action against the consumer. Negotiation, while much easier prior to the repossession, may not be a post repossession option. Yet, there are a variety of actions available to the consumer in order to redeem their vehicle.
When late payments, missed payments, repossession or other actions against a consumer occur, the credit score of that particular consumer can be greatly affected. This in turn, will significantly inhibit the consumer's ability to take future loans.
Source: Alabama.com, "Alabama consumers' credit scores are 48th in nation and worsening, report says," Alex Walsh, Nov. 13, 2012