Car Hire Purchase - early payment

colinuk

Would anyone know how one's credit score would be affected if you were to arrange finance for a car and then pay it off before the end of the cooling off period, which is two weeks, in this case. I understand that the credit score will reduce slightly on arranging the finance, however I have heard conflicting advice about what happens when you pay off the HP finance in its entirety so quickly. I have heard that paying it off in full can increase your credit score slightly, while other advice suggests that paying it off so quickly will result in your credit score falling again, because of a dip in credit utilisation.

Any pointers on which would be more likely would be helpful. As an aside my credit score is currently scored as Excellent.

Thanks

ViolaLass

Credit scores are irrelevant. Credit history matters.

colinuk

ViolaLass wrote: »

Credit scores are irrelevant. Credit history matters.

So considering the bigger picture, i.e. history, the actions outlined in my original post wouldn't necessarily have much of a negative effect on my credit 'report'? Considering the finance was applied for and paid off within two weeks?

Thanks

YorkshireBoy

I took a PCP deal last year (purely for the £1,500 dealer contribution). Only the search shows on my credit reports. There was/is no agreement on my credit reports. How could there be?...I withdrew from it by paying it off within 14 days.

One possible downside is anyone searching my credit file might draw the conclusion that the finance was declined. However, they may also draw the conclusion that I decided not to proceed with the purchase for whatever reason. Granted, only a small proportion of applicants will do as I did, and as you propose to do. But if your credit history is as sound as mine then it should have no impact on future credit applications.

phillw

YorkshireBoy wrote: »

I took a PCP deal last year (purely for the £1,500 dealer contribution). Only the search shows on my credit reports. There was/is no agreement on my credit reports. How could there be?...I withdrew from it by paying it off within 14 days.

Isn't the dealer contribution reliant on you taking out the finance? They don't withdraw it if you cancel within 14 days?