Whether you have gone through the process of applying for car finance before, or this is your first time, there are some details that many don’t know about the process. The biggest question of all is what do lenders actually look for in order to approve an application for car finance and give credit?
To answer that, we list all the major factors that play a considerable role in determining whether a lender will finance your car. Here is what lenders typically look for:
The most important element for lenders to consider is your credit score. If you have a poor or bad credit score, it may be harder to get car finance. However, there is no need to despair as Moneybarn can often offer car finance even if your credit score is low or poor.
If you are worried about your credit scoring, there are ways to improve it. Take a look at our tips on how to improve your credit score.
After checking your credit score, lenders will look at your public records. One of the reasons they do this is to see whether you have any bankruptcies or judgements against you. Lenders take this information seriously since customers with bankruptcies, especially in their recent past, might be a risk to lend to and therefore this might be a reason why you can’t get finance.
Another important factor that determines whether you will get car finance or not, is your employment status and income. It is only natural that lenders will ask if you are employed and they will want to know your salary details. This information will give them an idea about your financial situation and also help them to assess the affordability. There are minimum requirements that you need to fulfil in order to receive finance as companies often have specific policies about lending. All responsible lenders have to ensure that they are offering you finance that you are able to repay.
It may also be that the finance company you have applied to will search the electoral roll for your details. This is a verification process that lenders go through to confirm your name and address and ensure that there is no risk of fraud. If you aren’t on the electoral roll already, then getting yourself added before you apply for a loan may help you to get approved.
It is often easier to get finance if you have had credit in the past. The further your credit history goes back, the better, as you will subsequently have more to show. Lenders are looking for signs that you are trustworthy and responsible in order to make a decision. The better you have been at paying back credit cards and finance in the past, the more likely you are to be approved for car finance now.
Whatever your situation is, we are here to help and advice you. We are proud to be offering our services to people in an IVA or with a CCJ and we even accept finance applications from customers with poor credit.
Whatever, your situation, you can always consult Moneybarn to see whether we will be able to offer you the finance you need for your next vehicle purchase.