Good preparation before applying for car finance with bad credit is key to getting good service, a good rate and the finance you need. You’re asking for a second chance, so it’s important to give them a reason to give you one. Here are our top five tips to help you secure finance in the most hassle-free way possible.
You are best to be completely honest with your application, as the financiers will look deeply into your application, and if they find any discrepancies, this will give them a poor sense of trust and then may view your application less favourably. You are approaching a bad credit car loan financier for a reason, and they understand this, so your best chance is to be completely honest and not withhold any important information that could be related to your credit worthiness.
You are able to access your credit file for free online which can be a good idea prior to applying. However, it can be good to get in touch with a car loan broker who can perform what is known as a 'soft' credit check to ensure accessing your credit report doesn't impact it further.
This way you can be informed in regards to what is exactly on your credit file and if you are unsure about anything on your file, you can contact the listed companies to investigate further. The more information you have prior to your application being submitted, the less work the financier has to do.
Find out more on how to build your credit report.
As the bad credit car loan financier will want to review your bank statements, the best way to give you a better chance of car loan approval, is to show some savings history, even if it is a real small amount per week, as this will show them that you can put money aside from your income and your day to day expenses.
Don’t worry if you haven’t saved much, as this will not prevent you from obtaining approval, but be very cautious not to allow your bank accounts to be overdrawn, or allow any direct debits to be dishonoured, as this looks poorly on your own ability to service the new proposed car loan, and the financier will want to direct debit your repayments, so this will be considered when reviewing your application.
It could be a good idea to provide the financier with a copy of loan statements from any recent or current forms of credit you may hold. Being able to show regular loan repayments for a long period of time, or being able to show loans repaid in full, will help you prove your credit worthiness.
If you have just started a new job, you will need to ensure your probationary period has expired. If your job status is casual, ensure you have been with your same employer for a minimum of 12 months prior to applying. The bad credit car loan financier is looking at your employment history as your primary source of income, so it’s important to show stability here.
By following these five tips, you can put your case forward to your financier in the best possible light. While some of these tips may require long term work to put into place, getting your second chance finance application wrong could really put you further behind than you already are.
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