Credit Investigation

What Does Credit Investigation Mean?

A credit investigation is a process conducted by a financial institution to assess a potential client’s ability to repay a loan. If the client does not pass this assessment, the loan application will be denied. Insurance companies do something similar when you apply for a policy, and your credit history is one of the factors that can affect car insurance rates in most states.

Insuranceopedia Explains Credit Investigation

When someone applies for a loan from a bank or another financial institution, they are required to provide details about their financial history, such as their income, salary, and credit history. These details are then verified through a credit investigation, which may involve confirming the applicant’s income with their employer. Passing a credit investigation is often just the first step when financing a car, and buyers who owe more on the loan than the vehicle is worth sometimes add standalone GAP insurance to cover the shortfall after a total loss.