Is your credit score hindering you from buying a car or being approved for a car loan? Bad credit is more common than you think. Finder conducted a study on Australians to find out how many people were living with unstable income resulting in a bad credit rating. they found 21% of people have a bad credit score and 22% of people had too much debt to repay on their credit cards. You’re not alone!
Many things can happen that can hurt your financial history. You may have defaulted or fallen behind on some of your monthly payments, it happens. However, with us, you can still get behind the wheel even if your score is not perfect. There are several things you can do to get car financing and not let your past get in the way of affording a safe and reliable car.
The very first thing you should do is to check your financial history. Don’t assume that you have lousy credit because someone told you so. Just because you’ve had some late payments in the past doesn’t mean your credit is already bad.
One great way to check your credit score is to find out through national credit bodies, and the best thing about that is you can get a copy of your report for free.
After checking your report, do your best to improve your score. Try to pay off your past due accounts and dispute any errors that may appear on your report. If you’re applying for car finance, putting your best foot forward will convince lenders to be more confident in the fact that you can make your car repayments and will be more inclined to approve your application.
Don’t let all your hard work go to waste. In the time leading up to your application, avoid taking on major financial obligations, like having new credit cards. If you stay money conscious, you may avoid raising any potential red flags with the lender.
Always check your budget and stick to it. Many people make the mistake of taking on a better car that they can’t really afford. Know how much money you have left after paying all your monthly bills. The amount left is what you can afford to pay.
This paperwork, like proof of income, utility bills, among others, will help establish that you have a job, a good source of income, and capable of making your future car payments.
By showing that you are financially capable of making your car payments, these lenders will be more than happy to help with your car financing.
Once you’ve done all the legwork and ready to apply for car finance, you’ve not only improved your credit history but also gained one step closer to getting your dream car.
Reference:
Graham Cooke. Australian credit card and debit card statistics 2020. Updated .
