Hello Evom.
Recently installed new brake pads(Works blue pads on OEM rotor) and noticed loud squeak sound under light brake pressure on lower speed. Mostly around parking lot. No sound any other speed though. Today, I spotted rust on BOTH rear rotors(pix below). Looks like the pads dont reach the entire rotor. How can I solve this? Is this why causing squeak sound? Any help would be appreciate.

 

I would remove the caliper and take a look. There is obviously something wrong with the pad or caliper not allowing it to apply over the entire surface of the rotor.

Hopefully its something you can see right away and correct.

 

You can either wait for the pad to wear in all the way or you can replace the rotor. Those are your two options. I don't really recommend turning the rotors, you might as well replace them. The pads will wear in, it just might take a little time.
As far as the squeaking, did you bed them properly? I'm not familiar with those pads, are they known to be quiet?

 

while your in there looking at the pads, use disc brake quiet and your issues will go away.

 

Thanks. I did bed in procedure 2 times because i put new pads on old rotors. http://www.zeckhausen.com/bedding_in_brakes.htm

Friend of mine got same pads and has zero issues.
I am going to put grease on pads to see what happens.

Thanks a lot.

 

No problem.

I would add the grease and bed them again. Hopefully that will take care of it.