Are you struggling to get approved for a car loan? Is your bad credit score holding you back? Don’t worry, there are a few steps in which you can take to increase your chances of getting approved for bad credit car finance. Many people still think it is impossible to get accepted when you have a blow credit score. However, there are many bad credit car finance specialists available today who can help you secure the best deal possible for your circumstances.
Check your credit file first
The best place to start is with your credit file. You may know exactly where you’ve went wrong over the years or you can find yourself with bad credit even though you’ve never taken out any credit in the past! Your credit file can be really insightful, and you can check it online for free using a reputable credit referencing agency such as Clear Score, Experian or Credit Karma. You can improve your credit score in a few easy ways such as:
Register on the electoral roll
Being on the UK electoral roll can increase your chances of being approved for finance. Potential lenders can use the electoral roll to verify that you are who you say you are and prove your current address. Lenders tend to favour applicants who don’t move around as much as it makes them seem more stable.
Make payments on time
If you have many missed or late payments on your credit file, then you may be struggling to make repayments. However, making any payments on time and in full for a few months can increase your credit score. It also shows lenders that you are in a better financial position for a car loan.
Fix any mistakes on your credit file
When you view your credit file you should make everything is accurate and up to date. Even having the wrong address or missing middle name can decrease your credit score. You should also look out for any fraudulent credit accounts which could have been taken out in the past. Also, if you have had any finance or credit with someone else in the past you may still be financially linked. If they have bad credit, their score could be dragging yours down too. If you no longer have active credit, its best to dissociate yourself. You can fix any mistake or remove financial partners by contacting your credit referencing agency.
Save up for a deposit
Having a deposit can increase your chances of getting accepted for a car loan. It shows the lender that you can afford to pay a little more and are more likely to meet your repayment schedule. Having a deposit to put down also means that you don’t have to borrow as much from the lenders and can reduce your monthly payments and interest rate.
Consider a guarantor loan
A guarantor loan can be a great choice if you are struggling to get approved. If you’re already been refused car finance, a guarantor loan may be perfect for you. A guarantor loan is when a third party, usually a friend or family member, agrees to meet the monthly repayment schedule if you fail to do so. The applicant is responsible for making the payments each month but if they fail to do so then the guarantor will make the payment. For the lender, they have more confidence that the loan will be paid back on time and in full. However, if you have had trouble in the past meeting a repayment schedule, then you may not have anyone who would be willing to be your guarantor. Luckily, there are many no guarantor car finance options available.