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5 ways to get a better car finance deal
Whether you already drive a car on finance or you are hoping to dive in with your next purchase you’ll be keen to know how you can ensure you get the best deal. Luckily you can improve the rate you get and ensure you don’t get burned along the way by following our simple 5 ways to get a better car finance deal.
Analyse your current situation
Before you can start improving the deal you might get you need to know what you’d likely be offered right now. Up until now this meant actually applying for car finance and seeing if you get approved and at what rate, which is often counterproductive and can actually hurt your credit score and harm your chances of credit in the future if you do get declined. Instead you can now check your credit score using this car finance calculator which will not only tell you where your credit lands but also your chances of being approved and your likely interest rate. So now you know where you are at, what can you do to improve your position?
01. Pay everything on time and in full
The most common problems many of us face when it comes to our credit scores is defaults and missed payments. Many lenders understand that life happens, so don’t fret if you have had any of these as you can begin to repair the damage. Any and every bill you have, including credit cards, need to be paid in full and on time every month. Lenders care far more about your recent credit history over small mishaps years ago, so make sure you’re squeaky clean in the run up to applying for car finance.
02. Don’t apply for lots of credit
Too many applications for credit to close to each other can trigger lenders to think you’re desperate for credit and you can get declined. If you are about to apply for a mortgage, car finance and a credit card it would be advisable to apply for the mortgage first, then the car then the credit card. This is because lenders look at your affordability before approving your application so apply for the bigger more important stuff first. Comparing the market is advisable but applying to multiple places at once is not. You should apply to the companies you think you have the best chance of being approved with, most car finance brokers have a panel of lenders and can do this on your behalf.
03. Get rid of unused store & credit cards
Car finance lenders can look at the amount of credit held under your name and the more you hold the bigger question of your affordability. So, if you have credit cards, store cards or a mobile contract you no longer use then you should contact the companies you hold them with and get them closed down.
04. Repair your credit
If you find that you have really poor credit you can actively increase it with a credit building card, these are designed for people who can’t get more mainstream cards. Again, you MUST pay these in full and on time every month otherwise you can cause more damage. These cards will help build your credit and can show you are reliable at meeting your repayments, these are especially good for people who have a lack of credit history.
05. Join the electoral role
Finally, and possible the easiest of them all is to join the electoral role as this makes you really easy to find from a lenders point of view. Being on the electoral role can help prove you are who you say you are, making yourself easy to be found by lenders will speed up your application.
Well there you have it, five easy tips to improve your interest rate when you get car finance and even other forms of credit and loans. Remember that your most recent credit history is the most important and you should concentrate on improving where you are and not worry too much about your current rank. We hope you can take action and get yourself a much better rate when you buy your next car.