So, the question we are answering in this week’s blog is a simple one.
Can you get car finance with bad credit?
Well, here are a few ways that you can do just that.
This has the best long-term benefit but is the most time consuming of all the options here. Improving your credit rating is a good way to show lenders that you can be trusted with repayment. This increases your chances of getting car finance with decent rates.
Okay, so you may have a bad credit score. But what does bad actually look like? To get a decent view of your credit history, use a credit check service. This should tell you about any active credit, any missed payments and people who are financially linked to you.
This is a good place to start. Make sure all of your details are correct and up to date. Not only does this help when lenders do credit checks, but it will also reduce the risk of fraud.
You may have an old joint credit account with someone who has since fallen into bad credit. In cases like this, it is possible that the black mark against their name is dragging you down.
If you want to sever ties with these people financially, you will need to issue a notice of disassociation. After some checks, credit reference agencies should be able to remove this person from your file.
If you have a debt to pay off already, having a growing debt is not going to do you any favours. Keeping up with your repayments is a good sign to lenders that you can borrow responsibly. This will – over time – help to improve your credit score.
Also, try not to exceed 75% of your credit limit. Running yourself up to the wire again and again could be an indication that you are bad at managing your money. This also applies to late payments and exceeding your credit limit. Keep a close eye on your spending and prove that you can keep on top of your debt.This gives you a better chance of obtaining car finance with bad credit.
With finance deals like hire purchase or personal contract purchase, you’re usually asked to put down a deposit. Normally, this can be around 10%, but it will vary depending on what deal you are after.
Putting a little more money down at this stage could help the lender’s confidence in your ability to make repayments. This, in turn, may result in a better interest rate for you.