Why you should use a finance broker to provide car finance if you have bad credit
If you have a bad credit history, using a car finance broker such as Leaseworks is essential to secure car finance.
In the aftermath of the GFC most finance companies will refuse car finance to someone who has a black mark on their credit file. This could be as minor as a small telco default that you didn’t even know about because it got lost when you moved. Most people don’t even know they have been defaulted until they apply to obtain a car loan or car finance. Consider using a finance broker such as Leaseworks to source your car finance for you. Leaseworks’ consultants are experienced in explaining your history and presenting evidence of your ability to service a new car loan. We know which lenders are most likely to consider your application, and we have experience negotiating rates and conditions.
Before applying for a loan, obtain a copy of your credit report. Study it carefully to ensure the information it contains is correct. Often, important details are omitted such as that you settled a debt, or that the debt was in dispute. If records are incomplete or incorrect, you should apply to the reporting agency to have them corrected or removed before applying for car finance.
If you have current outstanding debts, try to settle them, or enter into a time payment agreement with the creditor. Having outstanding unpaid bills will go heavily against you when applying for any kind of finance. A continual bad history will tell lenders that you are unlikely to repay any loan, and make it very difficult to borrow.
The worst thing you can do is to try to cover up your history with false or misleading information. If you have made mistakes in the past or defaulted because of a marriage breakdown or illness, let us know so that we can put the best case forward to the finance companies. Let us show them that your bad credit history was the result of a one time situation and you are normally a good credit risk.
If you are able to find someone to guarantee your loan, obtaining credit despite a bad history will be much easier for you. If you can demonstrate a history of saving and managing your finances well since a default or judgement will also help. Other factors that influence a financier favourably are a larger deposit, and borrowing to buy a car less than seven years old.
Most importantly, make sure you budget sensibly and you can afford the repayments on your car loan. You can erase a bad credit history over time by making regular payments of agreed amounts, and avoiding taking loans that you are unable to repay on the agreed terms.
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