If you want to improve your credit rating, there are several actions you can take. Not only will these top tips increase your chances of being approved for a deal, but you might also find more favourable rates for your agreement.
Use a guarantor
As a student, you'll likely need to use a guarantor at some point in your university life. Many student houses and flats require a guarantor when signing a tenancy agreement, so you may already have some idea of what they are.
However, if you've never had experience with a guarantor before, we're here to help! Essentially, a guarantor is someone who kindly agrees to cover your car finance payments if, for whatever reason, you are unable to pay them yourself. Once a guarantor agreement is in place, it’s legally binding, so it's important you find someone capable of managing your payments, if needed. Most people choose to use a family member, but anyone can be a guarantor. Your guarantor should be someone who can vouch for you, as well as having the means to cover your car finance payments.
Using a guarantor can increase your chances of being accepted for student car finance, and may even help you get a better deal than if you applied solo.
However, if finding a suitable guarantor is a challenge, please contact us and we’ll see what we can do to help.
Improve your credit score
As a student, you may find that you have either a low credit score or, in some cases, no credit history at all. Having a poor credit rating may limit your chances of securing a student finance deal, and you may end up paying higher interest rates.
If you want to improve your chances of getting a good financing deal, an effective approach is to work on enhancing your credit score. Whilst building good credit takes time, it's a worthwhile endeavour if you're considering applying for finance in the future. Simple ways to bolster your credit report include:
- Registering to vote on the electoral roll
- Paying your bills and rent on time
- Having a mobile phone contract in your name that's paid on time
- Using a student credit card that's paid off each month
Each option will help you to build a stronger credit report, offering more flexibility when it comes to your student car finance. However, if you have a poor credit rating or you’re eager to get your new car, we can still offer you a finance deal. Please visit our Bad Credit Car Finance page for more details.
Get a part-time job and learn to budget
If you're new to university life, mastering the art of budgeting may be a shock to the system. It's a necessary skill, as budgeting accurately ensures you stay within your financial limits and never overspend on things you can't afford. By tallying your budget each month, you’ll know how much you have left, which can be allocated towards your student car finance. All you need to do is add all your income sources together (student loans, wages, maintenance grants), before subtracting your outgoings from the total sum.
Don’t forget to work out the other costs of running a car, including:
- VED (Vehicle Excise Duty, also known as road tax)
- Car insurance
- Fuel costs
- MOT and servicing fees, as well as funds for repairs
As you can see, the costs of running a car can soon add up! You need to make sure you have enough money to cover all of these things, as well as your monthly payments and your deposit. However, if an upfront deposit doesn’t suit your current situation, we also offer several no deposit car finance options.
This brings us nicely to our next piece of advice - securing a part-time job. Of course, this tip depends on your current university schedule, as students with intensive courses may have limited time. Not only does having a job boost your income, but it also makes you look better to potential lenders. This is because it shows that you have a regular and reliable income, making it easier to afford your monthly repayments.
However, if finding a job isn’t feasible due to your university commitments, we also offer car finance options for unemployed people, so there's no need to worry! Want to find out more about our no deposit deals and unemployed finance options? Get in touch here.