In the current situation with the credit crunch and tight lending conditions in the UK, its quite difficult to secure the finance or loan that you need for a car. What was once a relatively quick and easy process has now become more difficult, especially if you are looking at guaranteed car finance. This is where the lender will require a number of details relative to your financial position before they agree to give you the car finance.
As its often common that at one period in our lives we may have struggled financially, had trouble paying bills, meeting the repayments on a mortgage or had problems with some other type of debts; this can often affect our credit history as many UK lending companies can transmit your details to a credit agency which can affect your record. You should be aware that this could negatively affect your position when approaching a potential car finance provider.
So before you apply for guaranteed car finance make sure that you follow these points to ensure that your application has the best chance of being successful.
1) The company you are borrowing from will most likely check your credit rating and base their decision on it. Be certain to get a copy of your credit report prior to approaching the company. You can get a copy of your credit report online very easily these days. So even if your had a CCJ or skipped payments on a credit card or mortgage some time ago and forgotten about it, it could be a black mark on your credit history.
To get around this contact the previous lender and ask them directly to change the submission they have made to the credit report agency, or get a specialist company to do it. This may sound like a lot of work but in the long run it could save you thousands of pounds in reduced interest payments.
2) Make sure you a copy of your last six months of bank statements to show the potential lenders. They will be looking to see if you have been charged extra interest fees or if you have gone overdrawn at any time. Also they will be looking at when your salary is paid and how long this lasts you for before you spend it in your account. Your potential lender will want to make sure that you have the means to pay back the money you are borrowing. If the transactions through your bank don’t raise any eyebrows then this will be a major plus towards your goal of receiving guaranteed car finance for the vehicle you want.
3) Having steady employment with a good wage will also assist you in getting guaranteed car finance. Finance companies will view you favourably if you have been in your current employment for more than 1-2 years. They may also look at your job history for the past couple of years. This will show them how long each period of your employment has been and how likely it is that it will remain stable, because after all you may have difficulty paying back the outstanding finance that you have acquired if you are not employed, so the credit company will want to check first.
4) If you have a bad or adverse history of credit, using a deposit for your car finance is advised. If you can manage a 10-20% deposit from any money you have saved in the bank, then this will improve the likelihood of you being successful in getting a car finance deal.
To summarise because each persons situation is different you really need to approach a finance company and see what they require before worrying too much. Your main focus should be on the car you desire, then check how you can use guaranteed car finance to acquire it successfully.