Could a courtesy car harm my credit score?

climbthatwallseegar

I was involved in a no-fault accident last week. Another car ploughed into the side of my stationary car. The driver was apologetic, accepted blame etc. My insurers have said they are treating this has a no-claim incident and I do not have to pay any excess towards repairs. The car is currently with a garage appointed by my insurers and I have been given a courtesy car which I picked up from a hire company. I noted paperwork stated that the hire costs will be covered by the other drivers insurance and the hire company will “make all attempts” to recover costs from them. My concern is I’ve heard anecdotally of a case where a hire company couldn’t recover costs from an insurance company and pursued the other driver instead (ie the driver of the hired car). I don’t care about having to pay the costs but I am worried in case the late payment shows up on my credit score since, strictly speaking, the car hire company’s agreement is with me. Is this a possibility?

Brie

I think the problem is that if your car repairs take months and you have the courtesy car that entire time the insurance companies start get difficult about covering the cost.

Should the hire company decide to take a payment from your card you can pay it and there will be no issue with your credit record (fyi - a credit score is a fiction made up to sell you something you don't need). You would then talk to your own insurance company about paying you back for whatever was charged.

I'm not sure how you think a late payment will show up on a card.

climbthatwallseegar

I’ve been told the repair will take 3-4 days.

I don’t think a late payment will show up on a card (what does that even mean?). I meant if you miss payments it negatively impacts your credit score. I realise you think credit scores are a fiction so this point is irrelevant.

la531983

https://forums.moneysavingexpert.com/discussion/comment/82002005#Comment_82002005

They are a fiction. No lender sees them.

Brie

Yes if you miss payments to a credit card or are late with them then that will be reflected in your credit history.

Best solution is to set the card to pay in full by direct debit every month. If you aren't confident that you will have the full amount then either pick an amount you are comfortable with (say £100?) and the DD will pay that amount or the minimum required should that be higher. That way there's nothing negative on your history.

Glad you'll have your car back soon. I hate courtesy cars, same as any rental, all the controls are in the wrong place and I end up turning off the lights when I hit the turn signal or similar.

Aretnap

My concern is I’ve heard anecdotally of a case where a hire company couldn’t recover costs from an insurance company and pursued the other driver instead (ie the driver of the hired car).

The anecdote is almost certainly wrong, or at least incomplete.

The hirer does have to be liable for the hire car costs on some level, as only costs that they have actually incurred can be better recovered from the third party insurer. However credit hire companies would quickly go out if business if they regularly sent their customers demands for thousands of pounds of hire costs which they had failed to recover from the third party.

To get round the problem they find ways of making sure that the customer is legally liable for the costs in theory but not in practice. For example by including a clause to say that the hirer's liability is capped at the third party's liability, ie you only have to pay whatever can actually be recovered from the third party insurer on your behalf.

Usually the only exceptions where you can actually become genuinely liable for the costs yourself are where you have misled the hire company about the circumstances of the accident, leading them to believe that the chance of recovering the costs from the third party are higher than they really are, or where you refuse to assist them in claiming the costs from the third party (eg by providing witness statements or financial details to support your need for a credit hire car).

MyRealNameToo

Credit hire isnt reported to the CRAs so the only way it could impact your credit record is if you were to refuse to give the car back etc which creates a personal liability, they take you to court for the debt and you dont settle the court order within 28 days. If all that happens then you end up with a CCJ

I havent seen the direct wording on a credit hire contract for a long time but excluding ill intent by you the charges you are liable for are capped at what the third party is liable for and so if you run up a £20,000 hire bill but the courts decide that £4k was a more appropriate number then your liability is reduced to £4k and extinguished when the third party insurer pays it. The hire car company simply writes off the other £16k

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/82002005#Comment_82002005

Credit scores are not seen by any lender, they are not used by any lender. Lenders take the data on your credit history and put it into their own scoring systems which you will never see, the score you see plays no part in any lending decision, going up or down does not make any difference to your chance of credit