How to improve your credit score to qualify for car finance

Have you got a good, poor or bad credit score? Not sure, don’t know or are just confused? Don’t be, credit scores are actually pretty straightforward. If you think you have a poor credit history (this is also known as a poor credit score), don’t despair. A very large number of people are in the same position. We Finance Any Car may be able to help you to secure a poor credit score car loan.

Although being in debt is often seen as a negative, some types of debts are looked on far more favourably by lenders. For instance, owing a mix of lenders a lot of money might appear as a red flag. However, if you owe £250,000 to your mortgage provider, or you have short-term debt owed to your credit card provider, this will be looked at in a more positive light – and could even improve your score.

The effects of a poor credit score

If you do have a poor credit score, then the effects are likely to be;

You may find it more difficult to secure loans such as poor credit car finance and will perhaps need more assistance to do so.

You may need to accept the reality that borrowing will cost you more in terms of the interest rates payable.

The thinking here is simply that potential lenders may see you as a higher risk for something such as a car loan, than someone with a stronger credit score who might be eligible for products such as good credit car finance.

Improving your credit score

If you do have a poor credit score (or even a bad credit score), the good news is that there are some things you can do to improve it.  But, it’s worth considering the following;

Making lots of car finance applications to multiple potential lenders hoping you’ll find someone who responds, could possibly further damage your credit score.  This is because it looks desperate and will be flagged by the lenders.

Improving your credit score is almost always a process that needs to be conducted over time.  This may take months or even, years!  Perseverance and patience will be required.  Don’t be tempted by any organisation who claim to be able to fix your score quickly or in return for a small fee.

There are some things that can be done to help improve your credit rating:

• Get your current credit history score from any one of the main credit agencies. You have a legal right to view this for a very modest fee. This is an essential starting point.  There isn’t just one universal credit scoring formula.  In the UK, there are actually four main credit referencing agencies and for each of them you’ll have a different score.

• Do check your records for any what are called “indicative” errors. That usually includes things such as mistakes in your name or address, date of birth and so on. Sometimes that can cause incorrect associations between you and a third party.

• Make sure you’re on the local electoral register. The credit agencies use that as one factor to confirm you are who you say you are.

• Look for links between your records and those of another party. Remember if you’re sharing a loan with a spouse, family member or business partner, that if their credit history deteriorates it might affect yours too.

• Look for fraudulent activities associated with your details (e.g. identity theft type credit card applications) or plain errors whereby something that has nothing to do with you has accidentally been posted on your file. If you discover any such cases, report them to the credit agency immediately.

• If possible, try to keep to a single address for a period of time. Credit scoring agencies become uneasy where multiple addresses over a short period of time are involved.

• Make a special effort to pay your bills on time — notably credit card and other loan repayments.

No matter how confident you are in your credit score, it’s good to regularly check it so you know where you stand.

Remember, we are on your side and here to help.  Whatever your credit score, We Finance Any Car might be able to help you secure a poor credit car loan.