Car Finance Credit Score: Myth Busted

Did you know that your credit score isn’t the deciding factor on whether you’ll be awarded car finance? For traditional lending institutions, maybe – Car-Finance assesses more than your credit score when deciding whether to award applicants with loans. We also account for financial circumstances, the urgency of the loan you need, good payment history, reasons for missed payments, and the amount of other loans you have.

With Car-Finance, you’re just about guaranteed the car you deserve. We believe that everyone should access the car of their dreams, no matter their credit score, the car’s age, their insurance coverage, or whether they’re blacklisted. We understand that sometimes, financial circumstances fall out of your control. Here, we believe that it’s not about your mistake, it’s about your recovery – paying your car finance on time and in full will boost your credit score, helping you qualify for bigger finance in the future.

How Credit Scores Work with Car Finance

Credit scores are calculated with an algorithm unique to each bureau. Experian, Transunion, and XDS all have their own means of calculating credit scores, with factors such as credit utilisation rate, account balances, and payment histories all making up varying portions of how a score might be calculated.

All credit bureaus account for payment histories, your total outstanding balance compared to your salary (called a debt-to-income ratio), how much credit you use compared to the total amount you have available (called a credit utilisation ratio), late payments, and hard inquiries (formal credit checks by banks and lending institutions. At Car-Finance, we take a holistic approach to affordability assessments.

We’ll ask you for your reasons as to why you’ve made late payments, how much debt you have compared to your total income, and about your financial circumstances and expenses. This way, we can create a vehicle finance agreement with a tailored repayment period and terms.

Why Car-Finance?

Since our car finance is a long-term personal loan, our interest rates are lower, making your loan more affordable. Our team are experts in the personal loan and car finance space and can explain the terms of your loan and how it works with care and expertise.