This article is brought to you by CarLoan4U.
Having bad credit is never a good thing, especially in a time of economic recession. Banks don’t hand out credit as freely as they did before, for a start. Having a bad credit rating could be for a number of reasons; one could be that you’ve never borrowed money before! Despite going against all logic, this doesn’t help your credit history, as it doesn’t allow for a credit history in the first place. On the other hand, you may have made late credit card or loan repayments.
Whatever the reason, if you need a car, you’re also going to need car finance for bad credit. Fortunately, getting car financing with bad credit history isn’t an impossible task. Here are some of the things you can do to remedy your situation.
Stop spamming lenders with credit applications
Contrary to popular belief, flooding lenders with multiple credit applications once they’ve already turned you down once does not work. In fact, it will most definitely act against your best interests.
There’s nothing that looks more desperate than multiple applications from the same person, as it indicates that you are heavily saddled with debt and are possibly expecting more.
Check your credit report for mistakes
Surprisingly, not all credit reports are 100 per cent accurate. If you’ve got a bad credit rating, you should get in touch with a credit reference company like Equifax or Experian. These companies will not give you a credit rating but will send your credit information to the companies that you have applied for credit with. After the lender interprets the information sent by the credit reference company, they will determine your real credit rating, now that they have more accurate information.
For a small fee of £2, you’ll be able to physically see the details they have about your credit on file. This is important as you can then inform them of any errors in the report.
Keep your accounts tight and tidy
When a lender reviews your credit history, they’re not just trying to find out if you’ve had trouble repaying debts in the past. They’re also concerned about the bigger picture, like how easily you are able to afford the repayments.
Other things they’ll be looking out for include how tidy you are with your old accounts. For example, destroying a credit card when you want to move onto a different card isn’t enough. You also need to close the associated account, instead of leaving it dormant. Failing to do so will impact someone’s decision on what your credit rating will be like.
The most important thing to remember during this process is that whatever happens, there are ways around your bad credit rating. There are plenty of companies that offer their services to people in your position, and there are plenty of other people in the same boat as you. Perseverance is necessary, as well as an optimistic attitude.
Most car finance agreements in the UK are regulated by the Financial Conduct Authority, and anyone involved in the selling of car finance must be accredited by the FCA. You should always consider the terms and conditions of any agreement carefully before taking out any form of car finance, as you are making a substantial ongoing commitment and there may be significant costs if you change your mind or are unable to meet your commitments at a later date.