Having a history of a bad credit score will create hurdles in your path to getting the finance for your need. As with the case, it becomes quite difficult for lenders to accept your application because of your credit history. But don't be sad, as there is always a solution for every problem.
There are many options available in the market for people who have a bad credit history of funding their needs with suitable criteria. So, if you are also holding a bad credit history, then don't lose hope, as there is something for you too. You simply need to fulfil the requirements for the respective you are going to choose.
So, you also doubt to get accepted for finance, then get ready to be shocked. Because there are many lenders who are accepting applications with low credit scores for the no credit check car finance. Also, there are amazing tips by following which you can boost your credit history too for a better rate!
But, first thing first, let's just understand each aspect of bad credit or
car finance low credit score, towards the questions you are having in your mind!
What Does 'Bad Credit' Signify?
The term 'Bad Credit' stands for the previous repayment history or marks of yours towards any previous loans or finances you opted for and couldn't be able to complete those transactions on time. And hence, it creates your credit history data or rating, depending on your repayment pattern.
Thus, having negative credit history records or marks on your credit report delivers a poor credit rating or history of yours.
Your credit report holds all your financial history data from around the last past 6 years of various kinds of transactions like credit cards, any type of loan, or any left out debt that is yet pending. Hence, if you ever miss or delay any repayment transaction, it will display on your credit report and could possibly create a negative impact.
Also, a few other factors create a significant impact on your credit report, the sorts of credit you have taken out, the total fund you owe, and the credit you have previously borrowed in the past years. Also, not having a credit history can be equally worse.
Therefore, if you have newly moved to the UK or have never taken out credit before, you may be required to lend some money or fund to build your credit report.
Is it Easy to Get Car Finance with Bad Credit?
To be honest, the answer to this question is 'No'. But not even trying isn't a good choice too!
Fortunately, there are a number of options present for you in the market. Even you have a poor credit history. Many lenders provide various loans with specific categories, including your employment status and history, and many more.
Keep in mind that it is always beneficial to have multiple funding options with you while looking for a specific car loan and having bad credit to compare the rates you will have.
For example, may you be ineligible for the respective loan or funding you are actively applying for (e.g., Personal Contract Purchase) but are fulfilling all the requirements of another agreement (e.g. Hire Purchase)?
Also, how much of the respective fund you can spend down as a deposit impacts a lot and enhances the probabilities of getting accepted for the auto loan.
Is a Deposit Makes Easier to Get a Car Loan?
Yes, depositing a good amount makes it easier. In addition, when it gets to your brand-new car, it becomes to put an adequate amount as a down payment to get a better loan with sound rates. Also, by fulfilling some criteria of the agreement, maybe you don't need to make your first repayment or instalment within the first month.
But if you suppose to have a deal with zero deposit, it is also advisable to discuss this term with your respective lender. By doing so, you may get a deal of your preference. It is a critical factor to ponder, as you may be going to give higher instalments than the usual ones for each month's repayment. Also, in that way, you may be going to have a higher interest rate; thus, discussing first is crucial.
Hence, putting a good sum as your down payment or deposit is always a good option.
What to Do in Case of No Credit History?
Not having a credit history is not a good option for you. Aforementioned, having no credit history means having no previous credit transactions or never taking out any kind of credit in the past years. And due to this, it becomes hard for lenders to check your repayment or payment patterns and usually hesitate to fund you. Hence, you are required to take out some credit or funds to create your credit report.
Several lenders are also present in the market that provides you with the funding for your needs, even with your credit history or without a credit history. Thus, the loans that seem pretty easy to take out are the secured ones. For example, if you take out car finance, your car will act as the collateral security for the loan amount in that respective. Therefore, it will be a good option if you focus on getting a car than maintaining your credit history.
How one can Boost his/her Credit Score?
If you boost your credit significantly, it will help you improve your chances of getting car finance with a low credit score. And if you do so, then it will make things a lot much easier. For instance, if you carry out the proper practices as mentioned in the previous blog, it will help you get a boosted credit score and maintain your credit report.
As mentioned, it is pretty significant to have accurate and positive data on your credit report so as to get a fund quickly at lower rates.
Conclusion
In order to get car finance or any other loan like
10000 pound loan bad credit in UK quickly, you need to take out some practices, aforementioned. Thus, to improve your credit history, you need to focus on making the transactions of the repayment on time and responsibly. The lenders usually check your recent credit activities to take into consideration your application of car finance.
Once you have worked on the points to boost your credit score and find the right lender for your brand-new car. By doing so, your chances to get car finance increases drastically, and at the best rate!
