Understanding your credit profile - an Experian guide
If you have a credit profile query, tweet us your questions and we'll put these to Experian credit expert James Jones on Friday (21st Nov).
Four steps to the car finance deal you need
Looking for a new car? Whether you’ve gone for a brand new model or a second-hand purchase, you may need to pay for it in stages with a loan or hire purchase. With these types of finance, a good credit rating can be the difference between getting a good interest rate or not, or sometimes getting any deal at all.
1. Get your credit report in order - It’s a good idea to check your credit report before you make a car finance application. Doing this allows you to see what your prospective lender would see about you, and gives you the chance to correct any inaccuracies and update any out-of date information on your credit report. Your credit report includes things such as whether you have kept up to date with payments on other loans and credit cards, the total level of credit that you already have, and how much of that you’re using.
2. Keep up to date with existing loans - Lenders like to see evidence that you might be a responsible borrower before they commit to a loan. Given that late or missed repayments stay on your credit report for at least six years, it’s important to keep up to date with repayment commitments you still have.
3. Look at the finance options - Sometimes dealers have their own finance plans including Hire Purchase, where you pay a lump sum as a deposit to drive the car away, and then pay the rest of the money in monthly instalments over a set period of time, with interest. Some people go through specialist brokers, while some traders now accept credit cards. There are different pros and cons to all of these, depending on your individual circumstances. Do your research – and always remember to check the small print for hidden catches!
4. Get your Experian Credit Score up - The credit score the lender gives you tells them whether to accept you as a customer or not –the higher your credit score, the better your chance of getting your loan. The Experian Credit Score is a guide to help you understand your credit report, and how the way you’ve managed the credit you’ve had in the past might affect applications you’re making now – so getting that up could give you an indication of what kind of loan you might get.
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