Everyone needs the chance to prove themselves and to get ahead in life, and oftentimes circumstances can drastically be improved simply by having your own transportation.
If you have been refused car finance in the past, it can be daunting to put a car on the road. You might not have been given a full explanation why your finance application was denied, and you are scratching your head in wonder asking, ‘What went wrong?’
Bad Credit Score?
Filed for bankruptcy in the last 6 years, have a County Court Judgement (CCJ), or late on bill payments? These things will adversely affect your credit score. Or perhaps you have a low-to-no credit history? If you are asking yourself, ‘What is a credit score?’ then this might be you. But not all is lost.
It takes time to establish or re-establish your credit history. To help recover it, you can try purchasing a few small items, e.g. T.V., household appliances, etc., on finance or hire purchase with a regular payment schedule to build up your lending reliability.
Age: Young/Elderly Borrower? (terminology)
In the UK, you must be 18 years or older to be considered for car finance. If you are a young adult, you may need to have a parent/guardian act as a guarantor for your loan. Or if you are retired and are living on a pension, you may think that you will not be given finance to own or even be able to lease a vehicle, but this is not necessarily true.
The determining factor will be in how well you score against a lender’s financial analysis criteria. This is true for anyone to be financed. You must be able to provide personal financial histories for a lender to approve your application.
Emigrating to the UK?
If you are moving to or have recently arrived in the UK it may be difficult to get financial credit. You should make sure you are entered on the Electoral Roll for ease of identity verification, and make sure that you have paid outstanding debts from your last country of residence. You need to be able to trace your residential addresses for the past three years as well.
Do you hold a full driver’s license? It might be that you hold a Learner’s License, the big ‘L’, and are not yet fully licensed to drive a motor vehicle. Also, there are certain criteria that can show up on or hurt your credit rating connected with your driving record, such as car accident claims. If you receive a traffic infringement, e.g. speeding ticket, this will not affect your credit unless you fail to pay your fine.
Where did you apply?
There are specialised lenders that help people who have low-to-no credit scores. It might be worth shopping around to see which companies provide financial services for customers who are building up or repairing their credit scores. Do some research online before you apply. There are also many personal credit eligibility checks online that are free and won’t affect your credit rating.
There are set criteria that you have to satisfy in order to be successful in your car finance application. These include proven personal histories, i.e. employment, income/expenditure, residential/address, and credit.
Be prepared to provide documentation and proof with your application, because failing to do so may result in being declined. It is best to do some research prior to applying, as being declined by lenders can hinder your credit rating overall.