Car Finance - is it worth me applying with a poor credit score

loumegjess

Hi, first of all sorry if this in the wrong thread as not sure where to put it

I am looking to get car finance but wanted to know what type of criteria there is to meet.

In the past I treated my credit rating like dirt and didn't pay anything so have several defaults which resulted in my score going as low as 120, I am now at 330 (which is still poor) but have realised the error of my ways and now want to improve my rating.

For the past 18 months I have paid everything I have borrowed and have taken out two high interest cards (capital one & black diamond) which I pay every month just so I can increase my score.

I am now looking at getting a car on finance and wanted to see if there would be any point in applying.

I am employed full time earning 25k a year and have a vehicle which is valued at just under 5k which I want to use as part exchange.

I'm looking to get a car which is roughly 7-8k and use mine as a deposit, is it likely I will be accepted with such a poor credit score or should I just continue to pay my bills and maybe apply in say 12 months when hopefully my score will have increased a little more.

gb12345

loumegjess wrote: »

Hi, first of all sorry if this in the wrong thread as not sure where to put it

I am looking to get car finance but wanted to know what type of criteria there is to meet.

In the past I treated my credit rating like dirt and didn't pay anything so have several defaults which resulted in my score going as low as 120, I am now at 330 (which is still poor) but have realised the error of my ways and now want to improve my rating.

For the past 18 months I have paid everything I have borrowed and have taken out two high interest cards (capital one & black diamond) which I pay every month just so I can increase my score.

I am now looking at getting a car on finance and wanted to see if there would be any point in applying.

I am employed full time earning 25k a year and have a vehicle which is valued at just under 5k which I want to use as part exchange.

I'm looking to get a car which is roughly 7-8k and use mine as a deposit, is it likely I will be accepted with such a poor credit score or should I just continue to pay my bills and maybe apply in say 12 months when hopefully my score will have increased a little more.

First off, ignore the credit scores - they are meaningless figures generated by the credit agencies and have no bearing on the lenders.

Car finance is easier to get than a personal loan as the lenders are taking less risk due to having the car for security.

Have you had the credit cards for 18 months? (your post isn't clear on when you got them). Also, when were the defaults?

None of us here can tell you that you will be accepted, you won't find that out until you apply.

If you can cope with the car you've got then there really isn't much point getting a new one and the longer you wait, the better your chances will be as your history will look better.

You-kip

You won't get car finance with a history of not paying back what you've borrowed it's as simple as that.

My brother in law use Motonovo & Have used Close finance in his dealership and you would be surprised how many people get turned down every week'its loads.

Also take no notice of car finance is easier to get as its an old wife's tale at the end of the day if you've a dodgy credit file you'll be rejected.

loumegjess

The credit cards are both fairly new (around 5 months each), as for the defaults the last one was 18 months ago I've not had any since.

I can cope with the car I currently have but wanted a new one due to being in a position where I can afford to upgrade and the fact I was now clearing previous debts and paying on-going debts comfortably.

I am in two minds as to whether to do now or in 6 months when I would have more history of positive paying back and just wondered what the likelihood was due to my poor credit score.

gb12345

You-kip wrote: »

Also take no notice of car finance is easier to get as its an old wife's tale at the end of the day if you've a dodgy credit file you'll be rejected.

The specifications provided to me by finance companies for designing their decision support systems would tend to indicate that you don't really know what you are talking about.

KingElvis

Even if you got approved, you'd attract a deal from the scummier end of the market which on a second hand banger would end up crippling you financially.

loumegjess

I was recently declined for a payday loan (didn't budget for something that came along a week before I was paid) so I am thinking I will probably be declined for a car loan as well.

loumegjess

KingElvis wrote: »

Even if you got approved, you'd attract a deal from the scummier end of the market which on a second hand banger would end up crippling you financially.

I wouldn't be getting a banger as I would be putting my car which is valued at just under 5k in as a deposit against a newer car.

Apples2

Why don't you just save up 2 grand?

Even if you do get accepted, it will be a stupid interest rate.

If you do go for a stupid interest rate, you haven't learned anything.

InsideInsurance

You-kip wrote: »

You won't get car finance with a history of not paying back what you've borrowed it's as simple as that.

Disagree, have had a lease and a PCP from Mercedes-Benz finance and neither time have they actually done a credit check on me.

For the cheaper one they simply had a signed declaration of income and other normal credit application questions.

The second more expensive one they didn't even fill in the income but instead asked to provide current account statements.

Cars are much easier to get finance on than getting a standalone loan because the debt is secured on the vehicle. If the finance is provided by the car manufacturer then they tend to be even more relaxed because not only do they have security but they have the profit from the vehicle sale and its future maintenance to effectively offset the risk against.

SeanG79

You-kip wrote: »

You won't get car finance with a history of not paying back what you've borrowed it's as simple as that.

I must disagree, people who have had late payments on mortgage and a default on credit profile within the last 2 years but up to date and no issues for last 6-12 months have obtained finance...

My brother in law use Motonovo & Have used Close

finance in his dealership and you would be surprised how many people get turned down every week'its loads.

Those 2 lenders may decline many customers but they are by no means the only lenders in the market.

Also take no notice of car finance is easier to get as its an old wife's tale at the end of the day if you've a dodgy credit file you'll be rejected.

It IS easier to obtain car finance compared to a personal loan