Getting bad credit car loansFor borrowers with a less than perfect credit history, car finance can be difficult to come by. At least, good deals for bad credit car loans can be few and far between. That’s why it’s a good idea to go online and look at a specialist motoring website, to gain access to a range of the deals that are available.
For borrowers with a less than perfect credit history, car finance can be difficult to come by. At least, good deals for bad credit car loans can be few and far between. That’s why it’s a good idea to go online and look at a specialist motoring website, to gain access to a range of the deals that are available.
Bad credit will show up in your credit records when a prospective lender (who could be a car salesman offering finance) performs a search. Your credit history is held by a number of credit scoring agencies including Experian and Equifax. They keep a note of missed and late payments, arrears, County Court Judgments and bankruptcies for the last six years.
Before you apply for any credit, you may wish to apply to one of these credit scoring agencies first and obtain a copy of your credit report. Sometimes mistakes are made, and if you find any errors on your report you can apply to have incorrect adverse entries removed from your records.
You may also be able to “answer” any entries. For example, if you withheld the cost of a product because you thought it was faulty and subsequently got taken to court over the outstanding debt, you can have the opportunity to make reference to this reason for non-payment next to the CCJ entry.
Also, if you have been in a relationship with someone with a poor credit history and that relationship has broken down, apply to have the financial link with them severed on your credit report. Doing these things alone may improve your access to bad credit car loans.
You may find that there are plenty of products available to you, but that they are at rates you consider to be poor in comparison with the lender’s standard offering. It may seem unfair to be punished for your poor credit history, especially if you have changed your ways or worked hard to improve your circumstances. The high interest rates offered are merely a reflection of the risk the policy writer assigns to lending money to someone of a poor credit rating.
However, there may be ways of bringing down these high interest rates on bad credit car loans. For instance, if you can save a bigger deposit to put down on the car, you will only need to borrow a smaller proportion of the car’s value. If you can get hold of a bigger deposit, the loan would present a lower risk to the lender, who might reward you with a smaller interest rate.
Posted by Edwin Miles on