Monday, May 10, 2010

Bad Credit Car Finance FAQs

Bad Credit Car Finance FAQs

The following questions are the ones most regularly receive in relation to bad credit car finance loans.

What is a bad credit history?

All credit transactions are stored in your credit history. This keeps a record of all of your financial dealings with credit institutions such as lenders, banks and building societies. Bad credit, also known as poor credit or adverse credit, occurs when a consumer falters in their credit transactions.

This can be as minor as missing a credit card payment. Missed payments on a mortgage are a common cause of a poor credit rating. County Court Judgements are likely to result in a severely damaged credit rating, known as heavy adverse credit.

I have no credit history and I’ve been turned down for car finance, why is this?

Unfortunately, in some instances people who have no credit history have problems with applications for credit.

Some lenders will not lend to borrowers who have no history of credit, because their credit status is unproven. However, when it comes to car finance, there are a number of companies who will provide finance to people with no credit history.

How does having bad credit affect my car finance situation?

Most car finance lenders will still consider your application for car finance if you have poor credit, and many will offer you a deal.

However, some mainstream lenders will refuse you car finance or personal loans if you have bad credit. In some cases, poor credit car finance deals will be set at slightly higher interest rates, particularly in cases with heavy adverse credit such as bankruptcy.

Does having bad credit restrict the level of car finance one can receive?

Not in all situations. There are many lenders out there who believe borrowers should have access to car finance whatever their credit history, and whatever type of car you buy. The risk you represent to the lender may be passed on in higher interest rates on your car finance loan, however.

Is it possible to get car finance even with bad credit?

Absolutely. Just fill in the free, no obligation car finance enquiry form for those with bad credit below and one of our specialist car credit experts will contact you to discuss your options.