Leasing a car for business; bad credit history

zudecke

Hi guys,

I am still waiting for a 4.5 year old default to fall off my credit account.

My business account however is clean, with no debts and only profit.

I'm wondering if I'd be able to get a lease finance for a car under the business name where my personal credit history won't be a factor?

Is this possible?

Thanks as always!

Z

Edi81

Is your business a separate legal entity or are you actually self employed and zudecke trading as xxx?

If it's a separate entity ie Ltd company then possibly, if your accounts support the rental. If not, then it's your personal credit that would be taken used to make the decision.

How much was the default for? Has any of it been repaid?

zudecke

Hi,

It is indeed a separate entity, Ie. a private limited company.

It is however very new and only trading for the past 3 months, but has a projected turnover of 100k year one.

No debts no credit cards and no overdraft facilities.

With regard to my personal credit file... I defaulted on a student Mastercard from natwest to the tune of £250 and paid the debt off in full a week later. I didn't receive the letters they were sending as I was living on campus :-(. Another 2 years or so before the 6 year wipe off period passes!

Edi81

Your company is very likely too new to have credit in its own name without a personal guarantee.

However, your personal credit doesn't look too bad - £250 settled credit card default from over 3 years ago. It's possibly acceptable in your own name or with a personal guarantee.

zudecke

Edi81 wrote: »

Your company is very likely too new to have credit in its own name without a personal guarantee.

However, your personal credit doesn't look too bad - £250 settled credit card default from over 3 years ago. It's possibly acceptable in your own name or with a personal guarantee.

Thanks for the reply!

When is it likely my company will have built up credit in its own name?

I thought a default is a default and it didn't matter the amount or when? 6 years and that's that no?

Edi81

When I was a car finance underwriter it was 2 years of filed accounts at companies house before we would consider a company without a directors guarantee.

Defaults are not all the same. A small amount, now settled, with no further adverse /late payments is not looked as badly as a large default that remains unpaid.

zudecke

Thanks for the helpful response!

Do you think if I were to to be accepted for car financing somewhere, it'd be at a poor rate, given the (albeit trivial) default from 4 years ago?

Edi81

I don't think the rate would be too bad. Historically, car financing didn't charge on a risk basis but it may have changed as it's a number of years since I worked in the industry.