Advice on obtaining motor credit

Being refused for credit doesn't mean you can't get credit

Each lender has their own perspective on what type of customers they want to lend money to. So just because one lender has rejected your application doesn't necessarily mean that all lenders will. Be careful not to make too many applications as this can adversely affect your credit score. Using a service such as Motor Credit Check can help your dealer place your loan with the lender most likely to accept your credit application.

Finance rates and credit scores have a close relationship.

Very broadly speaking the lower a person's credit score the greater the likelihood that the customer will not repay the loan. This is not a perfect science but its the main indicator that lenders use when deciding to accept or reject a customer's application. The greater the proportion of a lender's customers that do not repay the loan, the higher the rates that lender needs to charge to the paying customers to cover this 'bad debt', hence the lower the score the higher the rate offered. This doesn't mean that all customers will default or be slow making the repayments, but the statistical likelihood of any individual getting into trouble increase as the credit score decreases.

Improve your credit score

Here are some simple tips to help you improve your score.

  • Make sure you are registered on the electoral role. Lenders will check this and if you are not showing on the role at your current address it will be a lot harder to obtain credit.

  • As mentioned above avoid making multiple finance applications over a short space of time. Lenders take this as an indicator that you may be struggling to get finance and it can have a serious affect on your credit score. Services such as Motor Credit Check can assist in this respect by helping you understand where your finance applications are best focused without adversely affecting your credit rating.

  • Pay back what you borrow. It sounds obvious, but by repaying credit on time you will make you much more attractive to future lenders as you will have demonstrated that you are a responsible borrower.

  • Pay by Direct Debit wherever possible. By using Direct Debit your payments will be made on the date they are due and this will be a major plus on your credit file.

  • Lenders like stability. A landline telephone number is a good indicator of stability. Other things that can demonstrate stability include living at a single address, holding a single job and sticking with the same bank over extended periods.

  • Ensure that you give accurate and honest information when applying for credit. Lenders use sophisticated services for checking the data submitted by potential customers and inaccurate information can cause problems when making a finance application.