Finding your ideal set of wheels is only half the battle when it comes to securing car finance. In reality, the most crucial part of the process is getting a credit check so lenders can assess how likely you are to repay your loan.
The credit check will reveal your credit score – a rating based on financial history that helps lenders determine who qualifies for a loan, potential risk, interest rates and credit limits. So, what counts as a ‘good’ score?
What is a good credit score?
Having a good credit score increases the likelihood of securing a low-interest loan, meaning you pay less overall. In contrast, falling below the range makes it harder to find funding.
Unfortunately, it isn’t easy to provide a definitive answer as the key credit reference agencies (Call Credit, Equifax, Experian and TransUnion) have independent scoring systems. Plus, most lenders adhere to internal guidelines.
However, a recent Experian report provides some clarity. According to their findings, in September 2019 the average credit score was 715 for a new car loan and 662 for a used car loan. Despite this, their website categorises someone as “good risk” if their score falls between 881-960. The contrast in figures suggests it’s relatively easy to obtain finance even if you fall below the desired limit.
The scores calculated by TransUnion and Equifax are more generous. TransUnion defines “good risk” as between 604-627 while Equifax goes even lower at 420-465.
What does My Car Credit define as “good”?
If you use our free car finance calculator, you can select which credit profile best suits your circumstances. The information button defines each credit profile, with “good” described as:
- 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
Evolution Funding, the broker behind My Car Credit, uses a combination of Experian and Equifax scoring combined with their own clever algorithm to determine which lender is best for your circumstances. Evolution Funding defines a good score as being an ‘Evo Score’ of 650 and above. However, they cater for customers with scores much lower than this so don’t feel disheartened if you have a less than perfect credit score. There is also lots of advice available in our Help & Advice section on how to improve your credit score.
How we can help
If you have a compromised credit history, you may still be eligible for finance. There’s just a little more work to be done before acquiring a loan. That’s where My Car Credit can help. Using your application details, our team works hard to find a suitable deal from our panel of more than 30 lenders. Get in touch today to see how we can help you.
Rates from 6.9% APR. Representative APR 13.9%
Evolution Funding Ltd T/A My Car Credit
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!