Making an application for car finance can be a daunting task, especially if you’re navigating the process with a low credit score. And, with new data from CarFinance 247 revealing that just 1 in 50 Brits with bad credit walk away with a car finance deal, understanding how to improve your credit will be a priority for many.
But just exactly what cars can you get on finance if you do have bad credit?
Source: CarFinance 247
According to CarFinance 247’s sales data, which reviewed finance deals from the September 2023 to February 2024, the top three cars financed on BAD credit scores were revealed as:
- VAUXHALL INSIGNIA
- VAUXHALL MOKKA
- FORD KUGA
On the flipside, the top 3 cars financed for customers on EXCELLENT credit scores came out as:
- LAND-ROVER RANGE ROVER
- MERCEDES-BENZ A CLASS
- MINI COOPER
If you were dreaming of financing a Land Rover over a Vauxhall, the experts at CarFinance 247 have partnered with Financial Coach, James Beckett, who shares everything you need to know about credit scores – including how to improve it…
What is a credit score?
James says: “A credit score is an attempt by credit reference agencies to grade your credit file. Credit score companies will most likely show you a different credit score as they use slightly different criteria. If your score has recently dropped, check with other providers to see if they have any information that your reference provider is missing. They are usually good at telling you possible reasons for your score being low.”
How to find the cause of a low score
James says: “There are several factors that can cause a low credit score and it can sometimes be difficult to pinpoint exactly what’s causing it.
“Start by checking for basic errors in your personal finances, such as missing a repayment. This gives strong signals to a lender that you are not able to afford another credit agreement. If you frequently resort to payday loans to make ends meet or bankruptcy on your record, these are also red flags that will lower your score.
“If you’ve never financed a car, had a credit card or any sort of loan repayment, you won’t have any credit history which can also impact your score as the bank has no way of knowing whether you will be a good lender.”
Try these simple methods to improve your score
James advises there are some simple ways to improve your score, by getting the basics right. He shares the things you should always do:
- Do set up direct debits every month to repay at least the minimum on your credit agreements
- Do consider setting up a joint bank account with your partner if they have a good credit score
- Do join the electoral register and make sure your addresses are correct
Plus he shares the things never to do:
- Never spend right up to the limit on your credit card and be consistent to prove your stability
- Don’t make multiple credit applications in a short space of time
- Never dip into your overdraft, as this is a negative signal to lenders
James adds: “Changes such as joining the electoral roll or paying off a big loan, could give you an almost immediate boost. You may be able to get from a poor score to a good score quite quickly by fixing these issues. But going from a poor credit score to an excellent one may take time. There is no fast track to building a credit history of consistent, on-time payments. For the very best scores, you need to show several years of stability.”
Building up a good credit score can be difficult. To help make the financing process as easy as possible for people with poor credit scores, CarFinance 247 offers guaranteed car finance on the vehicle of your choice, no matter your credit score history. Use this handy tool to get your quote today: https://www.carfinance247.co.uk/bad-credit-car-finance
