If you have a low credit score it can sometimes be a frustrating process to achieve suitable finance for your needs. With so many contributing factors leading to a poor credit score, finding a finance option for a car of your choice can be a time-consuming process. In this article, we will be providing you with everything you need to know about bad credit finance and how to potentially speed up the process.
What Are Your Options for Bad Credit Car Finance?
Dealing with financial difficulty can be a complication when looking for financial aid, as a poor credit score can have a huge impact on your ability to apply for finance with most lenders. However, with several poor credit loans out there such as bad credit car finance, you do have a number of options to choose from. This might be a hire purchase contract or personal contract purchase, which could allow you to gain access to the car you want, even with a poor credit score. It’s important to check if there are any limitations involved, such as maximum monthly mileage allowance, or minimum term agreements.
Understanding Your Interest Rates
Regardless of whether you opt for a hire purchase contract or a personal contract purchase, it is important to understand the interest rates that are available to you. These will depend on the broker, dealership or lender that you opt for and will determine how much your monthly repayments will be. There are several ways that you could possibly bring down your interest rates on your loan, one of the most popular is to increase the deposit. By increasing your deposit, you can often bring down the monthly cost as a result.
How to Apply If You Have Poor Credit
It is a common misconception that poor credit means you are unable to apply for any form of finance. Although this is untrue, it is best advised to do as much as possible to maintain or improve your credit score, to allow you a better chance of being approved. Don’t forget, there are options in the meantime, however. When applying for bad credit car finance, your chosen lender may take into account your credit score or in some cases base their decision on your monthly income. By taking into account your monthly income, they can determine if you are able to afford the monthly repayments for your chosen vehicle. It’s therefore important that you provide accurate information when applying, as misleading a lender to gain more credit can lead to serious financial difficulties, void the contract, and could result in having your car repossessed.
Improved Credit Scores for The Right Amount of Time
If you want to better your chance of being approved for a loan, you will want to ensure that you have improved your credit score as much as possible. One of the best ways that you can do this is to pay back your outstanding debt on time. This will have a positive impact on your credit score. Another way that you can better your credit score is to check it for free with the three main providers – TransUnion, Equifax and Experian – and ensure that all the information they have on you is correct. This will prevent any unnecessary negative effects and will ensure you are only being negatively affected by your own finances rather than the wrong address.
With this in mind, there are several ways that you can continue to improve your line of credit to gain access to your chosen car without breaking the bank. Where will you be starting?