Do you have a poor credit history? Is this preventing you from looking into the car finance market and getting yourself a new set of wheels? Perhaps you have been looking but your search has been unfruitful so far. Do not worry, it is still possible to improve your chances of securing a loan and arrange car finance even if you have bad credit. Let’s take a look at some of the ways you can ensure your application for car finance is successful.
Firstly, if you haven’t done this already, then you should register yourself on the electoral roll. The vast majority of finance companies will look at this when they perform credit checks on you. This to check if your name and address match up, and is the easiest way for finance companies to do so. This will not alter your credit rating but it will help with finance applications.
Conducting multiple ‘hard’ credit checks can actually have a negative impact on your credit history. The more loan applications you make the greater the negative impact on your credit. Why? Well, what this can show to other finance companies is that you have had numerous failed applications in the past, suggesting you are not a trustworthy applicant. So, it is wise to make as few as possible.
Having a ‘soft’ credit check is a much better idea, as it will give you a good indication if a company will offer you a loan, without the check appearing on your credit history.
You may not be in the financial position to do this, but if you can, increasing your initial deposit on any finance deal that requires one will increase your chances of obtaining a car finance deal. This is because the higher the deposit, the lower the amount of finance you will need to borrow, and so the risk is lower too. Increase the size of your deposit and access a higher number of car finance options.
Bad credit car finance allows people with poor or little credit history to obtain auto financing. This is a sensible choice because it avoids the need to make a large payment upfront in the form of a deposit. Instead, the finance is spread across a fixed term for a fixed period of time, where the applicant will pay a set monthly payment.
To start the process, a ‘soft’ search is conducted on the applicant first to provide a good indication of whether or not a finance deal is suitable for them. If the lender feels they can obtain finance for the applicant, then a ‘hard’ search credit check is performed to prove that you can afford to keep up with the monthly payments.
Last but certainly not least, if you do obtain car finance or you already have credit elsewhere, make sure to uphold your payments and pay off any debts you may have. The best way to apply for car finance if you have bad credit is to make sure you keep on top of whatever credit you do have. Missed or late payments are the biggest red flag on any credit file, so make sure you don’t have too many on yours.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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