5 ways to increase your chances of being accepted for car finance
Getting a car on finance is a great alternative to buying or leasing a car. For many people, it’s the only way to get access to one because of the prohibitively high cost of a car. But how do you increase your chances of being approved for car finance? Start by making sure that you’re eligible for car finance in the first place. There are a few basic criteria that everyone has to meet in order to be eligible. You need to be at least 18 years old, have lived in the UK for more than 3 years, hold a full UK driving licence, and you must be free from bankruptcy. You’ll also need to prove that you can afford the monthly repayments of your finance deal. Even if you meet all of these criteria, you may still be denied finance. Keep in mind, there are poor credit car finance specialists who can help you, even if you don’t have the best history. Here’s how to improve your chances.
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Improve your credit score
Your credit score is the main consideration for most lenders. The worse your score, the more likely you are to get rejected. With that in mind, improving your credit score is the first thing on our list.
First of all, you should find out what your score is at the moment – if it’s already good enough, the other methods in our list may be quicker and simpler. Check your score online Clear Score, Equifax, Experian or Credit Karma (previously Noddle).
Honour all of your financial commitments, whether they’re household bills or mobile phone contracts. Paying these on time and in full improves your credit score because it proves that you have a history of repaying money that you’ve borrowed. Don’t do anything to negatively affect your current credit score, such as applying for other things on finance or getting a pay-day loan. These may be a signal to lenders that you are irresponsible with your money.
Get a credit card with a small limit. It might seem counter-intuitive but getting a credit card and paying your bills on time is further evidence of your trustworthiness when it comes to getting finance. Spending a little each month and paying it back straight away is a simple way to improve your credit score.
Register on the Electoral Register
This is extremely easy to do and only takes a few minutes online. Registering to vote allows lenders to find you easier by tracking your address history. You can register online here – https://www.gov.uk/register-to-vote
Get a bigger deposit
The bigger your deposit, the more likely you are to get approved. It means that your monthly repayments are lower than they would have been if your deposit was smaller. This might also mean that you can pay off your debt in less time. You may even be able to afford a more expensive car.
Apply for joint finance
Joint finance is when you share responsibility with somebody else for paying back your car finance loan. If you have a partner, friend or family member who is willing to join you in a car finance deal, then this can be a great option, halving the deposit and repayment burden.
Get guarantor car finance
A guarantor is somebody who promises to pay the repayments on your car finance loan, in the event that you are unable to. If you have been unable to secure a deal based on your own bad credit, this might be a good option for you. There is no risk to finding out if your guarantor is eligible either, only a soft credit check will be performed on their history, which means their credit score will not be affected by finding out. It is also much easier than before to use a guarantor because rules are less stringent. It used to be that a guarantor had to be related to you or be a homeowner, for example, but this is no longer the case. Your chances of getting approved for guarantor finance have greatly increased as you might now know more people that are eligible.
If you do all of the above, you should be well on your way to getting the car of your dreams!
Author: EyeT Solutions
