Looking to buy a new car? If you are then chances are that you are not going to have the money that you need to buy your car upfront. This means that a common approach to buying a car is to use car finance.
Car finance can be a great idea as it means that you don’t have to worry about paying out for your car all in one and you also can ensure that you buy the best car possible for your money. That said, if you are someone who is worried about raising the money for your car, then you might want to learn more about how bad credit can have an impact.
How do I know if I have a bad credit rating?
The first thing to know about is exactly what is bad credit. Your credit report is made up of all the borrowing that you have made throughout your life. If you take out credit and then repay it back on time and in full, then you are going to have a positive credit rating. However, if you do not make your necessary repayments on time, or have paid as much as you should, then you will have a bad credit rating.
How will this affect securing car finance?
When you have bad credit, you are going to be seen as much more of a risk to the lender than those who have a better credit rating This means that you are likely to have a limited number of lenders who are willing to lend you the money that you need to buy your car; as well as have a much higher interest rate to pay back on the borrowing that you do make.
Is there anything that I can do to change things?
The good news about bad credit is that it isn’t something that can never be reversed, there is always a chance to turn things around and get your credit rating back to where you want it to be. You just need to know the right approaches to take and what is going to work best for you.
A good start is to find a way to improve your credit rating, although this will take time. You can do this by making sure that you repay any of your credit payments on time. Not only this, but it is also a good idea to check your credit report as thoroughly as you can (you can ask for a copy of this) to check if there are any issues within it that could be reducing your credit rating and making it harder to secure finance.
One of the best things that you can do is to take the time to shop around, chances are, if you do this, then you are going to find a lender who is prepared to lend you the money that you need to buy your chosen car, whilst still keeping in with a good level of interest.