Good preparation and proper presentation of your bad credit car loan application are important when trying to obtain an approval, so we have put together some tip, which can guide you to getting a car loan with bad credit.
Tip 1 – Use A Specialist Finance Broker
Using a specialist finance broker that deals every day with bad credit car loans can make sure that your application is well prepared and presented to the correct lender to give you the maximum chance of a car loan approval. They will help you weave your way through the maze of documents and requirements you will need, and apply at a time that will be best for your circumstances.
Tip 2 – Obtain Your Credit File
Although you may already know that you have bad credit on your credit file, it is a good idea to get your own personal credit report and understand exactly what is on this prior to applying, as this will let you see what is on your file and allow you to try and understand why the history is that way by contacting any creditors that have listed any adverse on your credit file.
Tip 3 – Personal Banking Conduct Is Important
Most bad credit motor financiers will want to review at least 3 months of your bank statements. They can assess how you are currently living with your current income and expenses, and can also review if you have any other regular direct debits that come out of your account. You need to try and never have your bank statements go into a minus amount for a minimum of 3 months to give yourself the best opportunity. This means no direct debit dishonours, or overdrawn amounts, unless you have an authorised facility on your bank account.
Tip 4 – Clean Up Your Credit File
If you are able to have any defaults paid prior to applying, do this as a priority, as paid defaults reflect much better on your application, than unpaid defaults. You may even decide to get some legal advice from a specialist company that deals with credit files, as quite often creditors list defaults without following the correct procedures, and if this can be proven, they may have to remove this off your file altogether.
Tip 5 – How Long You Stay With Your Employers Makes A Difference
Employment stability is a very important factor for any loan provider, as your employment is your source of income which will be required to repay your car loan. If your stability is quite poor, the bad credit motor financier could be concerned about unstable income and any down time you may have in between jobs, could mean no income to repay your car loan.