For many people, owning a car offers freedom and a wide range of opportunities. However, buying a car can be expensive, which leaves many people questioning whether they can afford to buy a vehicle. There are several car finance options to consider, but if you have struggled to obtain a loan or finance in the past, you may be concerned about your ability to arrange finance. It is essential to be aware car finance companies operate differently from standard lenders, and you need to know what do car finance companies look for?
Many people have concerns about a credit check being carried out. If you have got CCJS, you are in a debt management plan, have a poor credit score or have been refused credit in the past; you will likely have doubts about passing a credit check and obtaining car finance.
However, having a poor credit score or a chequered credit history is no barrier to obtaining car finance. This is because car finance firms understand the importance of credit checks, but they also know it isn’t the full story regarding a person’s ability to pay off a loan or finance deal.
If you are concerned that the mistakes you made in the past will prevent you from moving forward today, don’t be, as there are UK car finance solutions that are suitable for you.
The first check carried out by a car finance lender is usually a ‘soft search’ on the applicant’s credit history. This doesn’t leave an imprint on your credit history so that this test won’t cause you problems in the future. The analysis examines how an applicant has managed credit in the past and helps a lender decide which form of loan is best for the applicant.
Aspects considered during a credit check include:
Not all of this information sits within an applicant’s credit report, so the applicant should provide it with their application. The better your credit score, the more attractive and affordable finance you can obtain.
However, some car finance firms will look beyond this, considering other matters.
As stated, your credit history refers to your past, not your present-day circumstances. If you can indicate that you enjoy a stable and suitable income, while being in control of your expenses, many car finance providers will welcome your application.
If you are in a position to offer a larger down payment, reducing the amount of finance you require, your application is viewed in a more positive light.
If you indicate you are confident about repaying the loan in a shorter time-frame, you send out a positive signal to the finance company. Paying off a higher amount each month saves you money, and it reduces the likelihood that your financial status will change before the loan concludes.
Having bad credit rating can cause problems in life, but it shouldn’t be a barrier to achieving your goals. Having access to a car is central to many people’s employment hopes, their social life, and caring for loved ones. Knowing what car finance companies look for provides you with a platform to make an informed application, hopefully helping you get the support you need to get on the road.
For guidance and support with car finance applications, contact NowCompare today.
