Car Finance: How The Motor Industry Is Helping Those With Poor Credit Scores
A lot of people rely on cars to help them commute to work and back on a daily basis, as well as transporting their offspring to school, doing the weekly grocery shop, and so on. These days, cars are seen as a necessity rather than a luxury, especially in areas where provision for suitable public transport is poor or even non-existent!
But the main problem with cars is that, for the most part, they are expensive. For example, you cannot simply set aside a small percentage of your monthly wages to go and buy a car outright, at least, not a car that will last more than 5 minutes without blowing up on you!
One could obviously save up a certain amount of money per month in order to go out and buy a brand new or used car with cash, but in practical terms this could take you several years to build up the amount of money you need, and is often a pointless exercise if you need a car now and not in 5 year’s time.
The obvious solution to this car conundrum is to go out and borrow the money you need. But what happens if your credit history is “questionable” at best? In these circumstances, car finance lenders would have traditionally declined you for credit as you are deemed “high risk”.
But did you know that, in 2014, the motor industry has started to realise that they cannot penalise or afford to be choosy about whom they lend to in order to sell cars?
In the past, mainstream finance houses would only lend money to people that had a good credit score. So if you have defaulted on a past loan agreement, or perhaps you have been late paying some of your financial commitments in recent times, you could have ended up being unable to buy that car of your dreams on finance.
How the motor trade is helping people out with poor credit scores
These days, a number of car finance lenders are giving ordinary folks who are otherwise good payers another chance. Not everyone sets out to deliberately withhold payment on credit agreements, and finance companies are starting to understand people’s spending habits and personal circumstances better without solely relying on computer logic to say “yes” or “no”.
For example, if you apply for car finance at Carbase.biz, you can do a pre-approval check to determine how successful you are going to be at obtaining car finance. A positive point to bear in mind about such checks is that they don’t leave any public imprint on your credit score; the only person that can see whether you’ve done this check is you.
In the past, whenever people wanted to apply for car finance, they would have to agree to a full credit search, which is publicly visible by any lenders looking at your credit file.
Too many of these searches in a short period of time causes alarm bells to go off at finance houses, because it’s typically indicative of fraud or desperation to obtain credit (and subsequently means you will get a big fat “no” from virtually any lender).
Thankfully, more and more car finance providers are starting to roll out these checking facilities for potential customers, so they can better control their credit files.