Will I Get Accepted for Car Finance?

White mini convertible purchased with car loan parked on road

In the UK, there are multiple options when it comes to paying for your car. Given that a car is the second most expensive purchase you will probably ever make, after a house, it’s very important you get the right option for you.

You can purchase a car outright – which isn’t for everybody – or you can opt for car finance. Some car dealerships offer their own finance options, but this is problematic. How will you know if your application for finance will be accepted? And do you really want to visit a car dealer, choose a car and apply in-store – with the risk of being rejected in-person? There must be an easier way… 

Read on as we answer all of your questions about car finance approval.

What actually is car finance?

Car finance is a credit agreement made between you and the lender, organised either directly with the lender, via your car dealer or using a car finance broker. Car finance involves paying for your car through an initial deposit payment, and then paying off the rest of the costs through monthly instalments. In the UK, it is common that car dealerships offer car finance options when consumers purchase a new car.

Can I get car finance?

There are several factors that can impact whether you can get car finance in the UK:

  1. Age – To take out a car finance plan, you must be aged 18 to 75 years’ old.
  2. Residency – You need to be a resident in the UK for at least three or more years. Most companies will not take on temporary residents.
  3. Credit score – For most lenders, this is a big one. The better your credit score, the more likely you are to get approved, but some brokers – like My Car Credit – work with lenders who will take on applicants with poor or bad credit scores.
  4. The car – The car needs to be less than 8 years old when you first take out the finance plan, and it must be less than 12 years old when the finance plan ends.
  5. Employment – Being able to prove you are in stable employment will be favourable for most lenders. Normally, they ask for your previous three months’ bank statements and payslips to prove this.
  6. Benefits – Most lenders will require at least half your benefits to be income based. Benefits that would count as a form of income are, Carers’ Allowance, Local Council Tax Support, Disability Living Allowance, Incapacity Benefit (long term incapacity), Tax Credits, Pension Credit and State Retirement Pension. For any other disability benefits, lenders are more flexible due to the nature of the benefit and will often accept government-funded allowance.
  7. Retirement – Despite being out of employment, retired applicants may be in a good financial position. They would still be required to have proof of their income, whether that be from a pension, investment or property rental income.

What is a credit score?

A credit score is an expression which represents the creditworthiness of an individual. It shows someone’s credit history and lets lenders know what kind of borrower they are and how likely it is that they will manage repayments.

When you apply for car finance, your credit score will be looked at by your lender. People with a higher credit score are more likely to be successful when applying for car finance, and sometimes they can even get better interest rates. This is because they are considered as a ‘lower risk’ when compared to others with a lower credit score.

Lenders will use your credit score to tailor a car finance plan to you. If you have a higher credit score, some lenders will approve your car finance quicker and can often offer you lower interest rates.

Can I still get car finance if I have a poor credit score?

A credit score can impact on your eligibility for car finance, but a poor or bad credit score doesn’t always rule you out. If you have a poor credit score, you will have to jump through hoops with some lenders. The worse the score, the more hoops you will have to jump through.

However, at My Car Credit, we aim to find a car finance option that works for people with a whole range of credit scores and personal circumstances. You can use our car finance calculator to work out if you will be accepted for car finance with your credit score – and to find the best car finance option for you from our large panel of lenders.

Would I get accepted for car finance?

You could go straight through your car dealer for your car finance option, but they often prefer to only offer car finance to good or excellent credit scores. At My Car Credit, we consider all individual circumstances, with the aim of making car finance as simple and accessible as possible.

We have the largest panel of car finance lenders meaning that we are more likely to get someone a car finance agreement. Our smart technology allows us to place you with the best lender for your circumstances in a matter of seconds. We also have a team of manual underwriters, who can assess your individual circumstances where we haven’t been able to find you a deal automatically.

Find out if you can get car finance

At My Car Credit, we aim to help you through every step of the car finance process to make the process as hassle-free as possible.

For an instant quote, and to see what car finance plan you are eligible for, please use our simple car finance calculator. We are open 7 days a week and our website has loads of helpful tips, guidelines and answers to any questions you have.

For more information, call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk.

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How to Get Car Finance with Poor Credit

Young lady looking happily at her phone due to getting car finance with poor credit

Between July 2018 and June 2019, 9 out of every 10 cars sold in the UK were paid through some sort of car finance. With that in mind, it’s clear that finance has become the most popular way to buy a car. However, many people are still unsure about their eligibility. Can you get car finance with poor credit, for instance?

In this post, we’ll explore how car finance works and how to get car finance with a poor credit score.

What exactly is car finance?

The FLA defines car finance as a plan that spreads the cost of a new or used car. Instead of paying the full amount for the car upfront, consumers can pay monthly towards the overall cost of their purchased car.

In the UK, it is common for car dealerships to offer finance options to their customers. Alternatively, you can get finance through dedicated finance brokers, who will offer a wide range of financial deals to their customers via a panel of lenders. This allows them to find the best available deals to suit each individual customer.

What impacts whether I am eligible for car finance?

Many factors can impact your eligibility for car finance:

  1. Age – To take out a car finance plan, you must be aged 18 to 75 years’ old.
  2. Residency – You need to be a resident in the UK for at least three or more years. Most companies will not take on temporary residents.
  3. Credit score – For most lenders, this is a big one. The better your credit score, the more likely you are to get approved.
  4. The car you want to take a finance plan out on – The car needs to be less than 8 years old when you first take out the finance plan, and it must be less than 12 years old when the finance plan ends.
  5. Employment – Being able to prove you are in stable employment will be favourable for most lenders. Normally, they ask for your previous three months’ bank statements and payslips to prove this.
  6. Benefits – Most lenders will require at least half your benefits to be income based. Benefits that would count as a form of income are Carers’ Allowance, Local Council Tax Support, Disability Living Allowance, Incapacity Benefit (long term incapacity), Tax Credits, Pension Credit, and State Retirement Pension. For any other disability benefits, lenders are more flexible due to the nature of the benefit and will often accept government-funded allowance.
  7. Retirement – Despite being out of employment, many retired applicants will be in a good financial position. They would still be required to have proof of their income, whether that be from a pension, investment or property.

How credit affects car finance eligibility

A credit score is a numerical expression, which represents the creditworthiness of an individual. It represents someone’s credit history and tells lenders a lot about what kind of borrower they are and how likely it is that they will manage repayments.

When you apply for car finance, your credit score will be looked at by your lender. People with a higher credit score are more likely to be successful when applying for car finance, and sometimes they can even get better interest rates. This is because they are considered as ‘lower risk’ when compared to others with a higher credit score.

Lenders will use your credit score to tailor a car finance plan to you. If you have a higher credit score, lenders can often approve your car finance quicker and offer you lower interest rates.

Can I get car finance with poor credit?

Many dealerships prefer to only offer car finance plans to good or excellent credit scores, which is not good news if your credit score is not particularly great. The lower your credit score, the more hoops they will make you jump through.

While poor credit can make some finance applications tricky, it doesn’t mean you can’t get credit full stop. At My Car Credit, we are committed to finding a finance package that suits you, wherever possible. With the largest panel of lenders out of any other UK broker, we are better placed to get you approved for car finance with a poor credit score compared to other brokers.

Our clever technology allows us to use data-driven decisions to place you with the best lender. We also have a team of manual underwriters who can assess each customer’s individual circumstances to ensure we always give you the best deal on car finance available from our lenders.

Our simple-to-use car finance calculator allows you to see if you will be eligible for car finance with poor credit. Taking your credit score into account, you can get a clear idea of the finance on offer, changing the loan amount and repayment term to suit you.

Where can I go to get car finance with poor credit?

If you’re looking to get car finance with poor credit, My Car Credit can help. Simply enter your credit score, loan amount and repayment terms on our simple car finance calculator and let us do all the legwork.

We’re fully FCA compliant, meaning our customers know exactly what they are getting from us. If you want to find out more about the car finance we can offer you with poor credit, get in touch with our team today. You can call us on 01246 458 810 or email enquiries@mycarcredit.co.uk.

Representative APR 23.9%

Evolution Funding Ltd T/A My Car Credit
My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Can I Get Car Finance With a CCJ?

Close up of a gavel representing CCJ

If you have a CCJ and you’re trying to get car finance, you’ll already know that it’s quite a difficult task. You might be wondering if it’s even possible to get car finance with a CCJ. Understanding how your CCJ affects your application could improve your chances of finding a car finance deal.

What is a CCJ?   

A CCJ is a County Court Judgement that is brought against you if you fail to respond to repayments. You receive a CCJ if your debtors (i.e. the people or organisation you owe money to) have issued you a written warning stating the amount you owe and that they will take legal action in the case that it isn’t paid. CCJs are kept on your record for six years, even after you have paid the amount back.

How does a CCJ affect car finance?   

Having a CCJ can make it very difficult to get a car finance agreement. Car finance lenders need reassurance that you will make your repayments and a CCJ makes this less of a certainty. However, your personal circumstances can determine how much your CCJ affects your chances of getting your car finance. In other words: the amount you owed, how much you’ve repaid and how long it’s been since your CCJ all make a difference to the way it’s viewed by a lender. 

How can I get car finance with a CCJ?    

Whilst you can get car finance with a CCJ as an individual, you could also consider finding a guarantor to be part of your application. Having a second party that is financially responsible alongside yourself can improve your chances of being approved. It is important that both you and your guarantor understand that this approach is a big responsibility. Whilst a guarantor car loan is a viable option, it shouldn’t be taken lightly. Read more about Guarantor Car Finance.  

My Car Credit looks at every applicant as an individual. We have a wide panel of lenders who are happy to consider people of all credit ratings and histories. You can conduct a soft search into your credit search, which will let you know where you stand without leaving a mark on your credit report.

 

Rates from 6.9% APR. Representative APR 23.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How to Get an Excellent Credit Score

Man sat looking at phone researching how to get an excellent credit score

An excellent credit score of 800 or over is exceptional. It means you’ll pretty much be accepted for any finance loan and you’ll get the best offers and interest rates. However, building this kind of excellent credit score takes time, effort and diligence. Here are some good ways to get started.

Credit score breakdown

Here’s a rough breakdown of how much each aspect of your financial history affects your credit score.

  • Payment History (35%) Never miss or be late on a payment
  • Amount of Credit (30%) How much credit and how many loans you’ve got
  • Credit History (15%) How long you’ve had credit
  • Multiple Credit Sources and Utilisation (10%) The types of credit you’ve got and how much you use them
  • New Lines of Credit (10%) Frequency of credit inquiries and openings

Never miss or be late on a payment

It’s simple: never, ever, ever miss or be late for a repayment. This is the fundamental rule of building a good credit score. If you can’t repay your credit loans in full and on time, a car finance lender will never be able to trust that you’ll stick to the terms of your car loan agreement.

How much credit and how many loans you’ve got

It’s important to have as many lines of credit open as you can manage to repay in full and on time. This proves to a lender that you are capable of managing your finances and spending sensibly. You can think of it as a track record of the way you look after your money: the more cases you have in your favour (i.e. the more lines of credit you have) the more reliable you appear.

How long you’ve had credit

Whilst opening new lines of credit is important, it’s also vital that you don’t close old ones. A large part of your credit score is determined by how long you’ve had your lines of credit open. So, even if you’ve paid off a line of credit (e.g. on a credit card) keep it open for a few years afterwards to strengthen your average credit length.

The types of credit you’ve got and how much you use them

It’s important to have multiple credit sources and optimise your utilisation on these sources. Utilisation is the measure of how much you use your cards, especially in reference to how close you are to ‘maxing out’ those cards. It is important to spread your costs over multiple cards as this proves to a lender that you are capable of managing your finances effectively. 

Utilisation below 30% 

Using multiple cards is important, however, it doesn’t mean anything if you’re using some too much and others not enough. It is vital that you keep your utilisation on each card at 30% or under, at all times. Consumers with FICO credit scores of 800 or more have an average utilisation of 11.5%.

You can calculate your utilisation rate on each card by taking the balance on the card and dividing it by the card’s spending limit.

For example:

Card
Balance
Spending Rate
Utilisation rate (%)
MasterCard
£1,000
£5,500
18%
Visa
£900
£3,000
30%

Frequency of credit inquiries and openings

Opening new lines of credit and inquiring into your credit options is important to building a strong credit score. When you first do this, your credit score will suffer. This is because somebody with more repayments to make presents more of a risk to a lender. However, your credit score will be stronger once you have made your first few repayments on time.

Building an exceptional credit score isn’t easy but it isn’t impossible. Follow these tips above and you’ll see your credit score improving in no time. If you’re worried about being accepted for car finance on your current credit score, don’t be. My Car Credit is open to discussing car finance options regardless of your credit score. Use our car finance calculator or contact us for more details.

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

What Are the Different Credit Score Ranges?

Couple leaning against red 4X4 wondering about their credit score range

Your credit score acts as a tool for lenders to know how risky it might be to lend money to you. To understand what your credit score means you need to know which credit score range it falls into.

All credit scores are split into a series of ranges which act as a rough indication of how well you are viewed by finance lenders. Essentially, the higher your credit score is, the more trustworthy you are in the eyes of the lender. This means that you’re likely to be accepted for loans and receive better interest rates. Credit scores run from 0 to 999 and are split into several ranges in between.

Here’s a full breakdown of the Experian credit score range and what it means*:

  • Excellent (961-999) – Will be accepted for loans and receive the best interest rates.
  • Good (881-960) – Almost certain to be accepted for loans and receive good interest rates.
  • Fair (721-880) – More than likely to be accepted for loans and receive fair interest rates.
  • Poor (561-720) – Could be accepted for loans and receive higher interest rates.
  • Very Poor (0-560) – Less likely to be accepted for loans and likely to receive high interest rates.

Understanding your credit score without knowing which range it falls into is like trying to understand a word without its context – the meaning of one relies on the other. What is also important is where your credit score sits in this range. For example, a credit score of 881 sits in the ‘good’ range on most credit score ratings which would indicate that you have a good chance of being accepted for loans and receiving competitive interest rates. However, 881 is on the cusp between the ‘good’ and ‘fair’ range. So, whilst you have a ‘good’ credit score, you’re not as financially secure enough to receive the rates that someone in the middle of that range.

At My Car Credit, we are happy to talk to you whatever your credit score and we’ll try our best to get you the right car finance deal for your circumstances. Use our car finance calculator to figure out where you stand.

For more information around improving your credit score, check out our blogs.

*Source: https://www.experian.co.uk/consumer/experian-credit-score.html

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How to Boost Your Credit Score in Your Late-Twenties

man in his late twenties wondering about how to boost his credit score

By your late twenties, you’ve probably got into the swing of managing your financial responsibilities and might be looking to take on a mortgage, apply for a credit card loan or perhaps exploring your car finance options. Here’s our advice on boosting your credit score and moving to the next financial stage of your life.

Stop making hard inquiries

Hard inquiries with financial lenders are bad for your credit score, especially if your application is rejected. It’s always best to opt for a soft search approach as this does not leave a mark on your credit history. Before you get to the point of applying, it’s also a good idea to look into your credit history and credit score so you know what to expect from a financial deal from a lender.

Consider multiple accounts

When it comes to your finances, it’s always best to have two or more accounts open. This proves to a lender that you are financially responsible. There are a number of ways to do this depending on your financial circumstances (e.g. you can pay one set of bills from one account and run any day-to-day expenses through the other). It’s important to remember that this doesn’t mean spending more money but spending more evenly across multiple accounts.

Managing your utilisation

It’s simple, spread your payments across your accounts. There are a few financial sites that will recommend a strict utilisation percentage (usually between 15 and 30%). However, a good rule of thumb is simply to use each account evenly. Spreading your payments and costs onto a number of cards proves to your lenders that you know how to manage your money.

Keep old accounts open

A good amount of your credit score is determined by your credit history. So, whilst it might be satisfying to close an account as soon as it’s paid off, it’s actually better to keep it open in many cases.

Punctuality is key

This is something that cannot be stressed enough, no matter how old you are. Punctuality is one of the main things that financial lenders look for because it proves your ability to make repayments. Our advice is to get everything on Direct Debit so you’re never late with a payment.

Your late twenties are a time to get yourself financially stable. It’s time to shake off the old bad habits from your early twenties and begin to manage your money properly. Take our advice on board and you’ll be off to a flying start!

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How to Boost Your Credit Score in Your Mid-Twenties

Young woman in mid-20s thinks about improving credit score

When you reach your mid-twenties, your financial life really starts to go up a notch. This is usually the time when you receive your first considerable paycheck, apply for a credit card and begin to take full responsibility for your expenditure. An important part of this step is establishing and building your credit score. We take you through the ins and outs of how to boost your credit score.

What’s a credit score?

Your credit score is a three-digit number used by lenders to determine your eligibility for finance such as a car loan. It is made by taking into account your credit history, which is a record of how you’ve managed your lines of credit in the past – the most common for people in their twenties being an overdraft, credit card, mobile phone contract and/or utility bill.

Your credit score affects what type of finance products you can get, and what interest rate you end up paying. Those with a higher credit score, for example, are seen as being a lower risk to lenders and so are more likely to be accepted for finance on a lower interest rate.

What’s a good credit score in your twenties?

Credit scores range from 300 to 850 – the lower your number, the worse your credit rating is. There are different evaluations of what determines a good credit score. One of the main credit reference agencies, Experian, generally considers a score of 700 or above as good. Having a credit score that is this high in your twenties is very difficult to achieve, as often there have been fewer opportunities to prove your creditworthiness. At this time, the average credit score is usually hovering around the 630 mark, so anything higher than this is highly beneficial.

How to boost your credit score

When it comes to improving your credit score, there are three essential rules you have to follow: make all your payments on time, optimise the way you use your credit and don’t open too many lines of credit.

Making all your payments on time is the important part of building a good credit score and is the first thing lenders will look at when evaluating you for a car loan. If you have a bad history of paying your utility bills, paying your rent, or making contract repayments (e.g. paying excess charges on your phone contract), there’s no reason for a lender to trust that you will make your repayments on a car finance agreement.

Optimising the way that you use your credit essentially means being sensible with your money. It’s a vital part of improving your score as it proves that you are financially responsible. You may well make all your payments on time, but if you’re maxing out your card every month or stretching your overdraft to the absolute limits, this is a warning sign for lenders. They could argue that the additional money to pay back on a car finance agreement, would be one step too far.

Opening many lines of credit (especially over a short period of time) can look suspect to lenders and could indicate to them that you need extra revenues of money to support your lifestyle. So, whilst it’s ok to have a few lines of credit, it’s best to only have what you need.

Whilst it’s not good to have too many lines of credit, you can improve your credit score by opening a credit building credit card account. This a card with smaller amounts of money on it, which you can use as an example to lenders of you being financially responsible. However, if you don’t make your payment and use the credit on this card excessively, you will harm your credit score. This is only recommended for those people that are financially secure, disciplined with managing their budgets, and want an additional way to improve their credit score.

Building a good credit score in your twenties is no easy task – you’ve just begun your financial life and you might not have had enough financial responsibilities to establish a good credit score. Don’t panic, there will be plenty of time to prove your creditworthiness, and as long as you follow the rules outlined above, you’ll get there in no time!

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Everyday Hacks To Improve Your Credit Score

Lady uses credit card to improve credit score

Whether you like it or not, your credit score is important. Want a credit card? Check your credit score. Want a mortgage? Check your credit score. Whatever way you look at it, your financial life is dictated by these three numbers. A good credit score is generally seen as being 670 or above. So, don’t sit around wasting time if you’re not there yet. Use our everyday hacks to improve your credit score.

Automate your payments

It’s simple – don’t miss your payments. You can make a standing order with your bank to make sure you’re prompt with payments. Alternatively, set a monthly reminder on your phone if you want to manually make payments.

Have a few lines of credit

When you have multiple open lines of credit – and they are being used correctly – credit agencies begin to take notice. It’s a sign of trustworthiness and organisation. Two or three is the sweet spot.

Use all your cards

Some people think the lower their credit card utilisation is, the better – they’re wrong. Using your credit card is a vital part of proving your responsibility to credit agencies. Don’t get yourself into debt making big payments, just make regular smaller payments – the kind of things you might normally make in cash or whack on your contactless debit card.

Balance out your cards

Make sure that your credit cards are levelled-off at all times. If you have one card that is looking a bit low, top it off with another one. Managing your credits by switching balance from one card to another shows financial maturity.

Pay off, don’t close off

Around 15% of your credit score is decided by the length of your credit history. If you close your old accounts you can shorten the time and affect your credit score. So, pay them off, don’t close them off.

Take out a credit builder card

If you haven’t had the opportunity to build up a credit score yet, or you’ve got a less than perfect score, take out a credit builder card. These are real tests: they have low credits and high interest rates, so manage this right and you’re onto a winner.

Piggyback on someone’s credit score

Adding yourself onto a credit account of someone with a good rating (with their permission!) is a great way of improving your credit score. It proves you are trustworthy with money. This is usually best to do with a partner or family member.

Up your credit limits

Don’t panic, we know this sounds crazy. This is actually a very effective way of lowering your credit utilisation and improving your credit score. Here’s how it works: you use £300 each month on your credit card but have a limit of £600, your credit utilisation is 50%. If you increase your credit limit to £900, your credit utilisation drops to 30%. Just don’t be tempted to splash out.

The three numbers that make up your credit score have a massive effect on your life, so it pays to improve it as much as possible. We’re sure that if you follow our credit score hacks, you’ll be on track to more approved financial applications, lower interest rates and a richer financial life.

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How can I improve my credit score?

Dial showing credit score of excellent through to poor credit score

The better your credit rating is, the easier your car finance journey will be – you’ll be offered lower interest rates and have cheaper repayments to make each month. So, it’s worth aiming for an improved credit rating! For those that are having difficulty getting car finance because of a poor credit score, we’ve got eleven excellent tips to help you out.

  1. Make sure you are on the electoral roll – Lenders check this to protect themselves against fraud and to check that you are who you say you are. You can find out how to register by visiting Your Vote Matters.
  2. Cancel any out-of-date credit cards – Many people switch cards regularly but forget to cancel old agreements if they no longer use the card. These lines of credit will still appear on your credit file and can make lenders wary about the size of your debt – some may fear that you will ‘max out’ these cards and then struggle to make repayments.
  3. Apply truthfully – Make sure that the information you provide on applications is accurate and truthful. Inconsistencies can have a negative effect on your credit score and could be considered fraudulent.
  4. Don’t over-apply! – Too many applications, especially in a short space of time, can have a negative effect on your future score. This is a bit of a ‘catch–22’ as if you get rejected, or the rate you are offered is poor, you’ll want to keep applying to see if you can get a better deal, but at the same time your chances of being accepted will start reducing. For initial research, we offer a soft search application that doesn’t appear on your credit file.
  5. Use a credit card to (re)build a history – Lenders want to see that you have a reputation of managing credit sensibly. Those with little credit history, even if none of it is bad, are often rejected because they’re difficult to predict. If you don’t have a (good) credit history, build one. The easy way is with any credit card – just spend a small amount each month on it (e.g. £60), and make sure you repay in full each month (preferably by Direct Debit).
  6. Top up your credit card – As well as making sure that all your repayments are made on time by Direct Debit, pay manually on top of this each month. That way you guarantee that you’ll never be late with basic payments, and you’ll also have the flexibility to pay for any further financial responsibilities.
  7. Update your credit report – If you have defaulted on credit or had a County Court Judgement (CCJ) against you, it will be recorded on your credit file. Even once debts are settled, some lenders may restrict who they lend to, especially if the CCJ has been given within the last 12 months. Therefore, it is important that as soon as your debts are settled, you make sure that your lenders inform the credit reference agencies and that your credit report is updated accordingly.
  8. Apply for a guarantor loan – If you’re getting rejected for a car finance loan based on your individual credit score, see if you can be accepted for a guarantor loan. This kind of finance option allows you to improve your credit score as you go along, as (in theory) you should never miss repayments. You’ll need to have a close friend or family member with a good credit score that trusts you to make repayments but will financially support you where necessary.
  9. Look carefully at the small print – Make sure that you look at all the information on your credit file to ensure it accurately reflects your current circumstances. Keep a watchful eye for any errors or evidence of charges caused by identity theft or fraud.
  10. Check if you are linked to another person – Having a spouse, friend or family member’s credit rating linked to yours through a joint account could affect your personal rating if they have a poor score.
  11. Include additional information – Where necessary, provide further information regarding any previous credit problems. If such problems occurred following identity fraud, redundancy or divorce, and your financial situation has improved since, you can add a note explaining this.

We hope this has given you a good insight into how to improve your credit score, but if you want any other information, you might be interested in visiting our related article:

How to check if you can get finance for a car without affecting your credit score

At My Car Credit, we are open to accepting applications from people with less than perfect credit scores. So, if you require further advice, please do not hesitate to contact one of our friendly My Car Credit Specialists – they will be more than happy to help and guide you the whole way through your car-buying journey!

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How can I check if I can get car finance for a car without affecting my credit score?

It’s natural that customers shopping around for car finance can be concerned that an initial credit search will negatively influence their credit score. Initial credit searches usually result in a mark on your credit score - especially when they are abandoned.

At My Car Credit, we help customers check their eligibility for credit before they formally apply for car finance – taking the worry out of assessing your options. We do this by carrying out a ‘soft search’ credit report at the very start of your application.

What is a soft search?

A soft search is a type of credit check which allows us to see your financial history (i.e. how you’ve managed your loans and finances) without having this information exposed to lenders.

Here’s how it works. We ask you to complete a short online application form that should take no longer than three minutes – the form will require simple details such as name, address, DOB, contact details, employment details, and history, etc. You will then receive an instant online decision on screen, as well as by email and text.

We understand that no two customers are the same and that several different factors can affect the outcome of your application. Our commitment is finding you the best finance solution possible. In order to do this, we adhere to lending regulation by placing all our prospective customers into one of two categories: prime and subprime.

  • Prime customers (those with a good credit status) will receive an actual annual percentage rate (APR) – this rate is a transparent one, i.e. in the majority of cases this will be the rate a customer will pay.
  • Subprime customers (those with an impaired credit history) will receive confirmation of their application and the My Car Credit team will work hard to access our panel of 34+ lenders to get the right deal for your circumstances.

Other than its convenience and the information it provides, one benefit of a soft search is that it is not visible to lenders. This means that it won’t affect your future ability to obtain finance, even in the case that you are rejected for finance with us.

If you were to ask for a copy of your credit report, you will be able to see the soft search on there – but (within reason) you can have as many soft searches as you like on your credit profile without affecting your credit score. Essentially, a soft search checks for the same kind of data that a ‘hard’ application would, without running the risk of obtaining a credit mark.

What does all this mean for you?

The approach at My Car Credit means that you have the freedom to shop around for car finance before making your final decision. It also means that you aren’t penalised if you are refused car finance, as you would be with other credit searches.

There is also no obligation or fee attached to the soft search application process with us. If you’re not sure that the quoted rate is right for your circumstances, you are free to take the information away with you – without a footprint being left on your credit profile. However, if you are happy to proceed with the rate you’ve been quoted, you can simply complete your application with us – it’s as easy as that.

Put simply: A soft search is a fantastic way of starting your car finance application without the worry of affecting your credit score. Whilst this provides a very good indication of where you stand in terms of being approved for credit, it is not a replacement for checking your credit history and improving your credit score before making an application.

 

Rates from 6.9% APR. Representative APR 23.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69 (incl. estimated £10 option to purchase fee), total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!