Although now is a good time to think about buying a new car, as the market for cars is struggling, it is also a difficult time to get credit. People and businesses around the world are finding it hard to get credit so having a good credit score is essential to help you get the finance you need to buy your car.
If you know your credit score then you will at least have an idea of what kind of car credit you might be able to obtain. Past credit history is what the money lenders will look at so if you have had difficulties, such as defaulting on payments or no credit history at all, then you will find it much more difficult to get finance. A good credit score is undoubtedly the key to getting the best car credit with the best interest rates and terms.
A credit report will give you a good idea or where you stand. It will show you every bit of credit you have had over the years and whether you have defaulted or not on the payments. This is the same information that the car credit money lenders will have access to.
Should you find that you have a poor or fair credit score then there are a number of ways you can improve it before taking out a car on finance.
- First of all there may be people on your credit report who are negatively impacting on your credit score. Ask for these people to be removed if they are no longer associated with you or your address.
- Secondly, you can get credit cards specifically for people who have a poor credit history. As long as you pay off the amount outstanding each month then these are a good way of building up a positive credit history.
- Thirdly, if you do have credit cards, try to not go up to the maximum spending limit. This is because the lender will look to see exactly how in control of your finances you are. If you have two credit cards with a lending limit of six thousand pounds and you are using five and a half thousand pounds of the credit limit then this will be seen less favorably than someone who is using maybe a thousand pounds of the credit limit.
- Fourthly, look for irregularities on your credit report, mistakes happened and perhaps there is something marked against you on the report that just isn’t true. Again, you can ask for this irregularity to be looked at before you take out a car on finance to make sure you get the best deal possible.
It may take some time to rebuild a credit score, but it is certainly worth it to get the best possible deal when taking out a car credit from a money lender.
When you apply for car credit you must enter the correct information as incorrect information can adversely affect your current application and also further applications. For this reason it is important that you check your credit rating before you buy a car. Furthermore, knowing your credit rating allows you to get a good deal on your car credit if you know that you have a good credit score.
It is quite easy to be able to see your credit score and therefore get your credit rating. There are online companies that offer this service for free or for low cost. Should you not score highly then there are a number of things that you can do to improve your credit rating which will help you get car credit in the future. Viewing your credit report can also highlight any irregularities, fraudulent activity, inaccuracies and credit history. There may be other people on your credit history who you are no longer associated with and you can apply to have them removed.
A credit report shows the car credit finance company just how much money you owe (if any), if you have missed payment, how much credit you have been offered compared to how much money you have borrowed.
Even if your credit rating isn’t high, there is usually some car credit finance available. Alternatively look at ways to improve it for future borrowing.