Having bad credit doesn’t mean you cannot be granted a loan or car finance. Paying off previous debts and adjusting your budget is just one of the many methods you can do to help yourself. However, bad credit does hinder your ability to be granted certain financial benefits, so it’s best to know how to structure your application so you can be approved.
One alternative to a car loan is one of the many car finance solutions such as leasing. You may have a better chance of approval if you have bad credit, and the requirements aren’t as tedious. Additionally, if you make your payments on time, it can help improve your credit score. Before long, your bad credit will turn itself around. So, before you apply, here are some things to remember to help your chances:
Before you start to consider what your disposable income is after all of your expenses. Ask yourself whether you can afford the repayments that the car finance company will set. You might be earning a reasonable income, but you still need to be able to make the payments.
Honesty is the best policy
When applying, let the financier know your current situation and how you got there. Car finance companies do run credit checks and will eventually find out how with a credit check. At least with your honesty, they will understand the situation better and still consider your application.
In line with affordability, pick out a car that suits your needs. A flashy car is nice to have, but the payments that come with may not be. So, choose a vehicle that will fit your budget and suits your lifestyle.
Next, you need to organise your paperwork. Ask the lender for all of their requirements and take the time to ensure you have everything you need. Once done, you can then send it to the lender or drop it off, depending on the requirements.
The number of applications submitted at the same time can also harm your credit score, especially if you have bad credit. Not only does it shows other lenders that you are seeking car finance it may impact your credit score. What you can do is send in one application at a time and wait for the decision before considering someone else.
Need more information? Read up on why your car finance application might be rejected.
Keep these tips in mind when you apply for car finance. That way, you can increase your chances for approval, and enjoy driving an affordable vehicle for your family.
