What happens when you have a bad credit rating?
Lets face it, Britain has been in recession for some time now..and as a result, it has left alot of people with bad credit.
Its nothing to be ashamed of, there are many different reasons why this has happened, from businesses failing, redundancy to houses in negative equity. But it has left many people with limited options as regards to getting a vehicle with bad credit.
The Main Problem:
Mainstream finance companies and banks use credit reference agencies to make a decision on lending the money to buy a new car. This is a really simple process on the mostpart, if your credit score is greater than N, you’re accepted for finance… if its less than N you are not.
This poses a huge problem because, many people *had* issues over the last 7 years or so, but those issues are now gone! Their situation is much better, and day-to-day life is just fine..but they can’t borrow the money to go out and get a new car.
The Solution:
Not really, its more of a partial solution. Basically you look for a lender who is going to “look outside of the box” and consider the *present* position, and not the past position. These financial institutions used to be few and far between, but even some of the more mainstream and high street lenders are having to look more into the current position of a potential customer, and not the credit file that is following them around.
So there is hope, if you can find a lender who is prepared to look at your current income/expenditure, and perhaps consider how the future looks..then you may well be able to get the new vehicle you are looking for.
A useful method is car leasing, where lenders are now paying more attention to your actual personal circumstances and less (in some cases, none at all) attention to the history. For example, Ultracar will *only* look at your present (and future) situation. The underwriting process is much more geared towards your current banking activity and time at current address.
