Top 10 tips to improve my credit score for car finance

Roman Danaev

Finance17 July 2020

Are you having difficulty getting car finance? It might be because you have a poor credit score. It might simply be a question of knowing where to look for it.

Here at One Car Finance we are able to consider any application — no matter how bad your credit history — and you get an immediate decision on competitively priced car finance deals.

Access to cheaper interest rates on your car finance — and less to repay each month — means that it’s still worth aiming for an improved credit rating. So, here are some tips about how you might pull that off.

1. Make sure you’re on the electoral roll

Let your lender know you are who you say you are by getting on your local electoral roll — it boosts confidence and makes your application for car finance even more welcome.

2. Cancel unused credit cards

Your credit score is not just about outstanding balances, but the amount of credit you have access to.

Try reducing that figure simply by cancelling any credit cards you’re not using.

Find car finance deals with the best rates!

Get a quote

3. But use what you have

But it’s still important to have a credit card and to use it.

Unless you are making credit purchases, lenders can’t judge whether you act responsibly and make repayments whenever they fall due.

To help establish a positive credit record or to restore a score that has taken a dive, use your card regularly and try to pay off any balance each month in full.

4. Only apply for credit that you really want

Every time you apply for credit, a credit check is made against you. Repeated checks like this might themselves drag down your score.

If you are looking for bad credit car finance, avoid testing the water by making multiple applications and instead do plenty of research and make informal enquiries before submitting a final application.

Take advantage of our inside knowledge and experience here at One Car Finance, where we do all the research on your behalf and only need to carry out a credit check once we have found the most competitive car finance deals.

To learn if you qualify for car loan today, simply use our car finance calculator and get an instant vehicle finance decision.

5. Check and correct your credit report

Credit reference agencies make mistakes too — and when these appear in your credit record they might prove costly. So check your credit score each year, look for any errors and, if you find them, ask for them to be removed.

If left uncorrected, it might be harming your credit score unnecessarily.

6. Timing might be everything

If you make an application for a loan that information remains on your credit record for a year.

Any negative information — such as your defaulting on repayments, having a county court judgment against you or being declared bankrupt — stays on your record for six years.

Even the worst record might be restored to a positive status in time, so it might be worth delaying any new application until the slate has been wiped clean.

When it comes to car finance with bad credit, though, few people want to wait that long and instead turn to us here at One Car Finance, where we are typically able to help find appropriate deals for those with even the poorest credit scores.

7. Clear all outstanding credit balances before making any new application

If you are not making your repayments on loans on time, that harms your credit score.

Catching up with those payments and clearing any balances doesn’t erase the record, but it does show that you’re actively doing something about it and might improve your score slightly as a result.

Once you’ve made that impression, it might be safe to make a new application for a car loan.

8. Don’t let others drag you down

There’s a major snag with joint bank accounts, loans, mortgages or even utilities accounts — and that is your own credit score is affected by that of your joint account holder.

If you know that someone has a poor credit record, avoid any joint account or borrowing with them, since their bad record might reflect upon your credit score too.

9. Shout out if you’re struggling

If you do start falling behind with any repayments on your borrowing, be sure to let the lender know about your difficulties. You may be surprised how willing most are going to be to rearrange repayment terms.

These are designed to help you make the revised repayments on time — and the more repayments you make on time, the better your credit rating.

10. Make sure your debts are registered to your current address

Lenders and potential lenders get nervous about multiple addresses turning up on your credit record of current loans. It might spell fraud.

So, if you have recently moved house, be sure that any current debts are all registered to the same new address.

Your monthly payment
Total charge of credit£3,731.35
Total amount payable£15,731.35
Apply now for your personalised, no-obligation quote

Car finance calculator

Must be between £3,000 to £50,000
Your monthly payment
Total charge of credit£0
Total amount payable£0
Apply now for your personalised, no-obligation quote