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10 ways to improve your credit score for vehicle finance

Apr 29, 2019 | News

Credit scoring is an important factor which will be considered when applying for vehicle finance and it can be difficult to repair a credit score from a poor rating. Our team of experts at Car & Van Finance Direct reveal 10 ways to improve your credit score for vehicle finance

Credit Scoring

Finance companies use credit scoring to determine the risk of offering credit or lending a sum of money to an individual, couple or business. This takes the form of a number, with a credit score provided to finance companies by three major credit reporting agencies: Experian, Equifax and TransUnion.

Credit scoring amongst other factors is used to determine whether to deny or extend credit once a finance application has been made, with a lower credit score meaning a higher risk to enter into a contract with that borrower

Here are our 10 ways to improve your credit score for vehicle finance

1. Check your files annually or before any major credit applications

Before applying for credit or finance of any type, it is important to ensure that your accounts are taken care of, keep an eye on this on a regular basis so that items are not forgotten about.

2. Register to vote

Registering to vote takes very little time and enhances your credit score, providing finance lenders with easier access to proof of address.

3. Don’t miss or make any late credit repayments

35% of your credit score is based on payment history, how long accounts are past due and the number of items that are past due on your credit file will impact your final credit score. If a payment is late, always try to make that repayment as being in default will have a larger impact on your credit score than missing a payment.

4. Don’t let association affect your credit score

A partner or flatmate with poor credit can have an impact on yours. Keep your finances separate from those with poor scores.

5. Minimise credit applications

Failed credit applications can impact on your score, you’d be better advised to use free eligibility calculators online rather than filling in endless applications.

6. Use a credit rebuild card

Using a credit rebuild card can help restore issues from the past and rebuild your credit history if payments are made in time.

7. Don’t withdraw cash from credit cards

If you need to withdraw cash from a cashpoint you’re better off using a debit card to do so.

8. Be consistent with personal details

Avoid being declined finance due to suspicion of fraud by using the same personal details when filling in finance applications.

9. Cancel store cards or credit cards that are no longer in use

Accounts that are no longer in use but are still active can show up on your credit file, simply cancel any store cards or credit cards that you no longer require to stop them impacting on your credit score.

10. Stay in one place

Staying in the same address will have a positive impact on your credit score. So try to avoid moving home at regular intervals.

New vehicles on finance

Have good credit and looking for a vehicle on finance? Look no further! Car & Van Finance Direct have a massive range of brand new vehicles and vehicle finance options available to suit everyone’s requirements. Interested? Simply fill in a contact form or call us on 02920789234 to get the ball rolling today!