Having bad credit can make it incredibly difficult to secure a beneficial and manageable deal for car finance. Lenders want to be assured that you will be able to meet each monthly payment without issue, and if your credit reports come back negatively, then you will face refusal. But even making multiple applications and having several credit checks conducted will negatively affect your history, so what are you supposed to do? Fortunately, we have some great tips for improving your credit score before applying.
How to improve your credit score
The first step in improving your chances of receiving an offer for a good car finance deal is to begin working towards improving your credit score. While you may be able to find a lender that specialists in bad credit car finance, it is always highly recommended that you spend some time simply taking steps to improve your credit score:
- Register to vote – This is quick and easy to do, so there’s no reason not to. Your potential lender is always going to want to run a credit check before accepting or refusing your application. They’ll need your name and address, which can be gained from the electoral roll – by registering, you are immediately making their life easier.
- Identify and solve issues with your credit history – If you don’t already, then you should regularly review your credit score, while also taking steps to get your hands on a copy of your full credit history. This means that you can check for mistakes personally, such as anything that might negatively impact a credit check – while also taking steps to improve your repayment history.
- Make your repayments on time – Lenders want to know that you can meet monthly repayments. A history of missing these kinds of payments will show up on your history, and could even result in accumulating debt. By keeping on top of all your current repayments, you can show potential new lenders that you are responsible and can be trusted to be lent credit. Doing this will also ensure that your credit score improves over time, helping you to secure more beneficial and affordable car finance deals in the future.
- Avoid opening too many loans and close unused accounts – Opening several new loans within a short space of time can signal to potential lenders that you are currently in financial difficulty, reducing the chances of them offering you a credit deal. In general, making more loan applications can lead to your credit score decreasing. Next to this is the fact that unused credit accounts should be closed wherever possible, cleaning up your current credit history.