We’ve put together some frequently asked questions for people who might want to learn more about getting car finance when they have bad credit history.
What Is Bad Credit Car Financing?
Bad credit car financing it is a loan for obtaining a vehicle that may have broader criteria than a traditional lender such as a bank when it comes to calculating an applicant’s creditworthiness.
A lender who specializes in offering car loans to those with poor credit history can take other factors into account besides a person’s credit history or score.
These factors could include whether the applicant can actually afford to make monthly loan repayments.
What can cause bad credit?
There are many reasons why you might be refused car financing and lenders may not tell you why you were rejected. This could be due to a poor credit history:
- There are no payments on utilities or previous loans or credits
- Make less of the monthly repayments agreed upon on credit commitments
- Pay only the minimum each month by credit card
- County Court Judgments
- Default on previous loans or credit agreements
- Bankruptcy filing
- Currently under an individual voluntary service (IVA)
- Having no credit history
How can I find out if I have bad credit?
You may start to notice that you are being rejected by lenders like your bank or other auto finance companies that offer low APR loans.
There is a way you can see for yourself by getting a free credit report from one of the top 3 credit reference agencies: Experian, Equifax, and TransUnion
How can I fix bad credit?
You might start by looking at your free credit reports so you can see what lenders see when they make a decision, which could be based on your past credit commitments and repayment behavior.
You may not even be aware of what affected your credit history if you’ve never looked at a free credit report before, such as missing payments on utilities and other bills in addition to loans.
If you currently have a product like credit card, you might want to try increasing your monthly repayments if you’re only paying the minimum each month and can afford it.
If you have bad credit, you may need to take on higher APR financial products and accumulate full repayments every month which will show up on your credit report. This could help strengthen commitment and the ability to repay any future loans,
Do I have to pay a substantial deposit to get car finance if I have low credit?
Some bad debt auto loan providers may require a deposit as part of their policies.
With Go Car Credit you can decide to pay a deposit only if the maximum loan amount that the finance company is willing to lend you is too low for the specific model and brand of car you really want to get.
Will a bad debt car finance company guarantee that my application is successful?
No ethical lender will guarantee that a bad credit car loan application will be approved. It will always depend on the specific criteria of the lenders, accessibility and confidence in your ability to repay the car loan.
It will be a poor credit car finance lender always perform a credit check?
All self-ethical lenders who specialize in bad debt should always perform a credit check. This is to make sure you can afford the monthly repayments on top of your other credit commitments that will show up in your credit history.
Why do I need to provide details on income and expenses for a bad car loan?
Another way for bad creditors to assess your affordability in addition to other current credit commitments and bills listed in your credit history, is to ask yourself questions about any other expenses that aren’t shown there.
It helps the lender identify your disposable income each month and this counts towards the total amount they are willing to lend to you and the actual monthly repayment amount.
Does getting a car loan with a bad credit lender mean that my credit will be better at the end of my arrangements?
Go Car Credit offers our existing customers the opportunity to apply for a renewal product with us.
As an ethical lender we will always evaluate the creditworthiness and affordability of all customers who apply with us. Whether it’s a new customer looking to improve their credit history or an existing customer looking to upgrade their vehicle.
If an existing customer qualifies for renew with usthey may be offered a lower APR on the next vehicle they wish to finance with us.
This article was published by: Gemma Simpson by title: Frequently Asked Questions About Bad Credit Car Financing
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